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Shell (RDS.A) May Divest Malaysian LNG Stake for $1 Billion


According to a recent Bloomberg report, integrated energy major Royal Dutch Shell plc RDS.A is planning to divest its stake in a Malaysian liquefied natural gas export plant. This sale is expected to garner more than $1 billion.

Per sources, the Anglo-Dutch energy giant is planning to divest its 15% stake in MLNG Tiga Sdn., which owns an LNG terminal on the island of Borneo. Malaysia’s state-owned company – Petroliam Nasional Bhd. – holds 60% stake in MLNG Tiga with pre-emptive rights. The plant has a production capacity of 6.8 million metric tons a year.

The divestment is part of the Shell’s plan to raise around $30 billion from assets sales in the three years through 2018 to help shore up its finances following its mega merger with BG Group.

The merger with BG Group raised Shell’s total debt level to $90.3 billion from $52.9 billion a year earlier. Hence, the company has been undertaking initiatives to reduce its ever increasing debt.

Recently, Shell divested its stake in four producing oilfields off Sabah, Malaysia, to local independent – Hibiscus Petroleum – for $25 million.


Headquartered in Hague, the Netherlands, Shell is one of the largest integrated oil and gas companies in the world. It explores for and extracts crude oil, natural gas and natural gas liquids. It has interests in chemicals as well as power generation and renewable energy.

Shell currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players in the broader energy sector include W&T Offshore Inc. WTI, Ultra Petroleum Corp. UPLMQ and CONE Midstream Partners LP CNNX. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.

Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.

In the current quarter, CONE Midstream Partners posted a positive earnings surprise of 19.38%.

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