Royal Dutch Shell plc (ADR) (NYSE:RDS.A) recently revealed that it plans to sell its stake in Comgas to Brazilian firm Cosan.
Cosan is the biggest natural gas distributer in Brazil and it recently struck the deal to acquire Shell’s stake in Comgas. Shell expects to receive roughly $380 million once the sale goes through and the proceeds will be in both equity and cash. The sale will most likely be concluded before the end of the year. The sale of the shares will allow the European oil giant to divert its focus towards other competitive high-quality assets and also to streamline its portfolio.
“This transaction allows us to focus our efforts in Brazil on areas where we see the most strategic value for Shell longer-term. Brazil is an important country to Shell, and our portfolio of high quality assets and development opportunities positions us well for the future,” stated Maarten Wetselaar, the director of Integrated Gas and New Energies at Shell.
Shell has numerous and diverse operations in Brazil, which include downstream businesses which it, owns through RaizenEnergia SA as well as its deepwater portfolio. The oil company also has minority shares in Lapa, Sapinhoá, Lula, Lara and Libra fields which are situated within the pre-salt Santos Basin near Brazil.
The recent changes of the industry laws in Brazil has opened up new investment opportunities in the country thus allowing shell to significantly boost its portfolio in the country. The Anglo-Dutch firm is particularly eying investment opportunities in standardized deep-water vessels by 2020.
Other than the sale of the Comgas stake, shell is also considering a divestment of its stake in Mukhaizna oil field which is located in Oman. Shell’s divestments are part of its plan to bring down some of the massive debt that it accumulated when it acquired BG Group for roughly $50 billion. It is also part of its divestment strategy running from 2016 to 2018, through which Shell plans to optimize its portfolio.
Shell stock closed the latest trading session on Wednesday at $61.23 after a 0.36 percent gain compared to the value of the stock during the previous close.