Shell could be in line to make $1bn (£750m) in the next two years by selling off North Sea assets as part of a $30bn divestment drive, according to UBS.
The bank predicts that Shell’s North Sea retreat will begin with a “tidying up” of the oil major’s high-cost, legacy assets but that a sale of its attractive core projects could not be ruled out.
UBS oil analyst Jon Rigby said that sales of the oil giant’s older North Sea assets would only generate “a few hundred million dollars” unless the company opts for a more “radical” approach including ditching stakes in the core projects that make up its $7bn North Sea portfolio.
By streamlining its Norwegian assets alone the company stands to make $1bn, he said.
“There is of course room to be even more radical, potentially exiting very significant pieces of business that have hitherto been regarded as core.
“These would be more difficult because the asset and relationships are more entrenched and there are bound to be more significant vested interests within the Shell organisation. But what better way would there be to signal a new, radically different business?” Mr Rigby said.
The Anglo-Dutch company is preparing to withdraw completely from as many as 10 countries and will sell off around $30bn of assets within the next few years in a bid to rebalance its portfolio after the costly acquisition of gas giant BG Group earlier this year.
In the North Sea BG’s portfolio is worth $1-2bn and includes the attractive Buzzard oil field as well as central North Sea gas assets, while in Norwegian waters asset sales of at least $1bn are possible, Mr Rigby said.
“But in total, including the West of Shetland portfolio, we carry the business at around $7bn,” he added.