Energy industry news : Oil and gas giant Royal Dutch Shell has entered into an agreement to divest its stake of 13.28% in Woodside Petroleum, an Australian petroleum exploration and production company for $2.7 billion.

Shell had earlier revealed that it had entered into an underwriting deal with a couple of investment banks to divest 71.6 million shares in Woodside Petroleum for $1.7 billion. These shares represent 8.5% of its stake in the company, for $31.10 a share.

Later on, in another announcement, Shell said that it would sell a further 111.8 million shares, which make up 13.28% stake in Woodside Petroleum owing to strong demand from its institutional investors.

Commenting on the sale of Shell’s stake in Woodside Petroleum, Jessica Uhl who is the Chief Financial Officer of Shell said: “This sale is another step towards the completion of our three-year $30 billion divestment programme, which is an important part of our strategy to reshape Shell, to deliver a world class investment case, and to strengthen our financial framework. Proceeds from the sale will contribute to reducing our net debt.”

Shell Energy Holdings Australia Limited (SEHAL), a subsidiary of Shell held a total of 77.28% stake in Woodside Petroleum prior to its divestiture.

Peter Coleman, the CEO of Woodside Petroleum said: “Woodside will maintain a close working relationship with Shell – as a joint venture partner and customer of Shell technology – and we recognise that Shell will always be part of our history.”

Shell anticipates the transaction to close today and expects settlement on 16 November.

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  Australia, Oil and gas news, Royal Dutch Shell, Woodside Petroleum