Shell approves $7.25B Canadian oil sands sale

March 9 (UPI) -- Royal Dutch Shell inked a pair of agreements to sell $7.25 billion worth of undeveloped oil sands interests in Canada to other companies in the country.

The move stands to reduce Shell's share in the Athabasca Oil Sands Project, previously a joint venture between Shell Canada Energy, Chevron Canada Limited and Marathon Oil Canada. Shell's Canadian subsidiary owned 60 percent of the project prior to the signing.

Under the first agreement, all 60 percent of the company's shares in the project will be sold to Canadian Natural Resources Limited, one of Canada's largest energy conglomerates. Under the second agreement, Shell and Canadian Natural will jointly acquire and equally own Marathon Oil Canada Corporation, which holds 20 percent of the interest in AOSP.

Shell officials say the move will help the company grow and further develop Canada's oil sands.

"This announcement is a significant step in re-shaping Shell's portfolio in line with our long-term strategy," Shell CEO Ben van Beurden said in a statement. "The proceeds will accelerate free cash flow and reduce gearing and make a meaningful contribution to Shell's $30 billion divestment program."

In addition to cash proceeds and Canadian Natural shares, the deal also includes intellectual property agreements valued at up to $285 million. Shell will continue operating as the AOSP's Scotford upgrader and Quest carbon capture and storage project.