Shell Explores Sale of a Norwegian Natural Gas Business
Shell Is Said to Explore Divestment of Norwegian Business Gasnor
(Bloomberg) -- Royal Dutch Shell Plc said it’s considering a sale of a Norwegian natural gas supplier, as the energy major continues to selectively dispose of assets.
The company is exploring a disposal of its Gasnor unit, a spokesperson confirmed in response to Bloomberg queries. Shell has approached infrastructure funds and private equity firms about a deal, people with knowledge of the matter said, asking not to be identified as discussions are private.
A potential sale comes at a time when Shell, like many of its peers, is looking for ways to transition to low-carbon energy. A string of divestments in countries including Argentina, Canada and the U.K. helped it cut greenhouse gas emissions in 2019, according to a report from the company. Shell sold part of its holding in the Nyhamna gas-processing plant in Norway last year.
The coronavirus outbreak has also exposed the vulnerability of some of the world’s biggest fossil fuel companies, with the pandemic expected to hit long-term demand and reduce oil and gas prices. Shell’s adjusted net income was $638 million in the second quarter, down 82% from the same period a year.
Its shares are down 48% this year, giving the company a market value of around $115 billion.
While the value of dealmaking in the energy sector has fallen by more than a third year-on-year in 2020 amid the coronavirus pandemic, according to data compiled by Bloomberg, there have been signs of a strong recovery in activity. The value of energy transactions has risen 93% in the last three months to $139 billion, compared with the same period a year ago, the data show.
The rise has been spurred by deals including the sale of a $10.1 billion stake in Abu Dhabi’s natural-gas pipelines to six investors including Global Infrastructure Partners, Brookfield Asset Management Inc. and Singapore’s sovereign wealth fund.
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