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Petroleum industry

Royal Dutch/Shell Makes Bid for Control of Woodside Petroleum

Strategic Insights

— 1 min read

Royal Dutch/Shell has proposed a takeover bid to acquire a 60% stake in Woodside Petroleum, Australia's largest independent upstream company. The bid values Woodside at a premium to its current market value of US$4.72 billion. Shell plans to transfer its Australian oil and gas assets to Woodside in exchange for new shares. The move is part of Shell's strategy to expand its regional presence, particularly in the Asia-Pacific region.

Key Takeaways:

  • Royal Dutch/Shell has made an unsolicited proposal to increase its stake in Woodside Petroleum from 34% to 60%.
  • The proposed takeover values Woodside at a premium to its current market value of US$4.72 billion.
  • Woodside will receive Shell's Australian oil and gas assets, which will more than double its market value.
  • Shell's bid reflects its strategy of regional expansion and restructuring, rather than outright acquisitions.
  • Woodside operates the North West Shelf LNG venture, with 16.67% equity, and has probable reserves of 1.133 billion barrels of oil equivalent as of 1999.
  • Woodside has a 50% interest in the Laminaria/Corallina oil fields in Australia, while Shell has a 25% stake.
  • Woodside is developing the Legendre oil fields, expected to come online in mid-2001 with a production capacity of 40,000 b/d.
  • The proposal suggests that Shell might transfer its US and African interests to Woodside as part of the deal.
  • Woodside has secured interests in 43 deepwater exploration blocks in the US Gulf of Mexico for US$25.6 million in January.

Statistics:

  • Woodside's current market value: US$4.72 billion
  • Proposed takeover value: Double Woodside's current market value
  • Shell's Australian oil and gas assets to be transferred: Estimated to double Woodside's market value
  • Woodside's probable reserves as of 1999: 1.133 billion barrels of oil equivalent
  • Daily production capacity at Woodside: 146,000 boe
  • North West Shelf LNG export capacity: 7.5 million tons per year
  • Laminaria/Corallina oil fields production: Began producing in November 1999
  • Legendre oil fields production: Expected to come online in mid-2001 at 40,000 b/d

Sources:

  • (1) Shell Australia, statement quoted in the article
  • (2) (OD April 13, p1)
  • (3) News article, no specified date or publication, referenced in the article
  • (4) Woodside Petroleum press release, no specified date or publication, referenced in the article

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