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Repsol Completes Sale Of LNG Assets To Shell

1/2/2014 2:57 AM ET

Spanish oil firm Repsol S.A. (REPYY.PK) said Thursday that it has completed the sale of liquefied natural gas or LNG assets in Peru and Trinidad & Tobago to European oil giants Royal Dutch Shell Plc (RDS-B: Quote,RDSB.L,RDSA.L,RDS-A: Quote).

In October 2013, Repsol sold its stake in Bahía Bizkaia Electricidad or BBE to BP Plc (BP.L,BP_UN.TO: Quote,BP: Quote), which exercised a purchase option over the asset.

The combined transactions represent total proceeds for Repsol of $4.3 billion (of $4.1 billion from the sale of assets to Shell and $0.2 billion from the sale of BBE to BP), and Repsol additionally sheds financial commitments and non-consolidated debt in line with the figures announced in February 2013 when the assets´sale was agreed.

The sale, which includes the minority stakes in Atlantic LNG (Trinidad & Tobago,) Peru LNG and BBE as well as the LNG sale contracts and time charters with their associated loans and debt, has generated about $2.9 billion for Repsol in profit and capital gains after tax, slightly higher than the guidance given when the transaction was agreed in February.

Repsol and Shell have additionally signed an LNG supply agreement by the latter to the Canaport regasification terminal in Canada of approximately 1 million tons over a 10-year period.

Following the completion of the sale, with an economic date set at 30th September 2012, Repsol said it reduces net debt by $3.3 billion and significantly strengthens its balance sheet.

With this transaction, Repsol said it has divested assets for more than 5 billion euros, surpassing the objectives outlined in the 2012-2016 Strategic Plan to divest between 4 and 4.5 billion euros in the period.

In a separate press release, Royal Dutch Shell announced the completion of the acquisition of Repsol S.A.'s liquefied natural gas or LNG portfolio outside North America for a headline cash consideration of $4.1 billion. As part of the transaction, Shell will also assume $1.6 billion of balance sheet liabilities relating to existing leases for LNG ship charters, substantially increasing the shipping capacity available to Shell's world-class LNG marketing business.

The deal gives Shell an additional 7.2 million tonnes per annum (mtpa) of directly managed LNG volumes.

The deal closed in 2014. Shell's capital investment in fourth-quarter of 2013 will reflect $3.4 billion for this transaction with the remainder of $2.0 billion booked in 2014 of which $1.6 billion is a non cash item relating to finance ship leases.

In addition, Royal Dutch Shell announced remuneration disclosure of former chief executive officer, Peter Voser.

As previously indicated, Peter Voser stepped down as Chief Executive Officer and as a director of Royal Dutch Shell plc with effect from 1 January, 2014. He repatriated to his base country, Switzerland, and became an employee of Shell Switzerland, from 1 January, 2014. He will leave employment with the Shell group on 31 March, 2014.

Shell noted that no payment for loss of office is made or will be made to Peter Voser. An annual bonus in relation to performance year 2013 will be determined at the end of January.

Shell said that Outstanding LTIP awards will not vest early and will be pro-rated for service, in line with the company's pro-rating policy. Voser has elected to defer 50% of his 2013 annual bonus, for which a Deferred Bonus Plan or DBP award will be made in early 2014. Outstanding DBP awards will not vest early and are not pro-rated. Outstanding share options awarded in 2004 can be exercised in accordance with their terms until they expire on 4 November 2014.

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by RTT Staff Writer

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