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Shell divestment streak continues with Hong Kong shedding

The company is trimming down after its 2015 mega merger with British company BG Group.

By Daniel J. Graeber
Shell divestment streak continues with Hong Kong shedding
Royal Dutch Shell moves one step closer to its $30 billion divestment goal with the sale of parts of its gas business in Hong Kong. File photo by Brian Kersey/UPI | License Photo

Jan. 3 (UPI) -- Royal Dutch Shell said Wednesday it's $150 million closer to its divestment goals after completing the first phase of the sale of a gas business in Hong Kong.

Shell said it dated the completion of the first phase of the sale of its Hong Kong and Macau liquid petroleum gas business for Dec. 31. The sale was announced in April and valued at $150 million. Shell's branded LPG is still on the regional market under the terms of a long-term licensing agreement.

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"Shell continues to operate the LPG plant in Hong Kong, which is part of the second phase of the transaction and is subject to conditions including regulatory approvals," the company stated. "The sale does not impact any of Shell's other businesses and Shell remains committed to helping meet growing energy demand in Hong Kong and Macau."

Shell has plans to leave oil and gas operations in handful of countries as part of a $30 billion divestment program. Around $23 billion of that has been completed to date. The company completed $4.4 billion in sales the day before releasing its earnings report for the third quarter.

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An agreement in late 2016 to sell its refining business in Denmark was terminated without closure on Tuesday, however. When it announced the agreement in September 2016, Shell said it would take in about $80 million in capital by leaving the Danish refinery sector behind.

Mounting financial pressures brought on in part by lower crude oil prices and obligations following its merger with British energy company BG Group led the company to call for "lasting changes" in its operations.

Shell reported a net profit of $4.1 billion in the third quarter, up from the $3.6 billion in the previous term. Third quarter profit came from all of its business segments, though earnings came mainly from refining, higher production from new fields and improved market conditions.

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