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Shell in talks over Gabon sale as seeks to hit divestment target

Published 25/11/2016, 13:56
© Reuters. Filled oil drums are seen at Royal Dutch Shell Plc's lubricants blending plant in the town of Torzhok
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By Ron Bousso

LONDON (Reuters) - Royal Dutch Shell (L:RDSa) is in advanced talks with a party interested in buying its onshore operations in Gabon as part of a $30 billion divestment plan following its purchase of BG Group, which was completed in February..

Shell had informed its staff of the discussions on Thursday, a spokesman for the firm told Reuters on Friday.

The oil and gas group, which plans to exit operations in 5 to 10 countries, has made relatively slow progress in its divestments as uncertainty over oil's outlook has dampened buyer enthusiasm for deals at the prices it is targeting. So far this year, Shell has sold or agreed to sell around $6 billion of assets.

Bids for the Gabon fields, which one source estimated could be worth around $700 million, were due in June.

Shell declined to comment on the identity of the potential buyer, but banking sources said that Carlyle Group (O:CG), the world's largest private equity fund, and Perenco, an independent European oil and gas company, reached the second bidding round for the assets.

As Shell and other big oil firms look to sell assets to weather the more than two-year downturn in oil prices, private equity and groups backed by funds have increasingly stepped into the sector.

A spokesman for Perenco declined to comment, while Carlyle did not immediately respond to a request for comment.

© Reuters. Filled oil drums are seen at Royal Dutch Shell Plc's lubricants blending plant in the town of Torzhok

Shell has been operating in Gabon for more than 50 years, and its holdings in the west African country include the Rabi Kounga and Gamba fields.

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