Shell agreed to sell its stakes in the Chevron-led Wheatstone-Iago joint venture and the Wheatstone LNG project off Western Australia.
The company sold its 8% equity interest in the Wheatstone-Iago JV and its 6.4% interest in the Wheatstone LNG project to Kuwait Foreign Petroleum Exploration Co. (KUFPEC) for more than US$1.1 billion.
Last week, the company said it was expecting a fall in Q4 profitability, with earnings for Q4 2013 expected to come in at $2.9 billion, compared to $5.6 billion in 2012.
“Shell will remain a major player in Australia’s energy industry,” Shell CEO, Ben van Beurden said. “However, we are refocusing our investment to where we can add the most value with Shell’s capital and technology. We are making hard choices in our world-wide portfolio to improve Shell’s capital efficiency.”
Shell’s other involvements in Australia include: a 24.27% stake in the producing North West Shelf LNG project; a 25% stake in the Gorgon gas project, which has an LNG plant on Barrow Island; and the Prelude floating LNG project developments, where it holds a 67.5% stake. All of these projects are expected to produce first LNG in the next few years.
The Wheatsone project was discovered in 2004, and sits in the Northern Carnarvon Basin. Chevron operates the project, and holds 64.14% interest. Its partners include: Apache (13%), KUFPEC (7%), Tokyo Electric Power Co. (TEPCO, 8%), and Kyushu Electric Power Co. (1.46%).
In October 2013, Chevron signed a long-term sales and purchase agreements with TEPCO to supply LNG from the project. Under the agreements, Chevron subsidiaries, together with subsidiaries of Apache and KUFPEC, will supply Tohoku, Japan with 0.9 million tons/yr of LNG for up to 20 years.