Shell keeps exploration and production focus in Australia

Dutch supermajor stepping away from aviation fuel sector in $250 million deal.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   May 31, 2017 at 6:14 AM
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May 31 (UPI) -- Royal Dutch Shell said Wednesday it was keeping its exploration and production portfolio in place in Australia, but stepping back from its aviation business.

Shell's aviation subsidiary in Australia sold to independent Viva Energy Australia for $250 million in line with the Dutch supermajor's efforts to streamline its portfolio. Shell keeps its brand name visible in the aviation refueling sector as Viva Energy remains the licensee of its fuels.

"Shell's upstream operations in Australia, which include exploration, production and gas commercialization, are not impacted by this announcement," the company stated.

Shell's presence in Australia extends into the natural gas market, operating in the Browse reservoir in Western Australia. The company is in the process of constructing its Prelude floating liquefied natural gas production facility, which is the largest vessel of its kind and can process the equivalent to Hong Kong's entire demand for natural gas.

In an annual review, the Australian government said demand pressures are weighing on the national energy sector as coal generators retire. That's leading to higher fuel and energy prices across the country. Citing "difficult market conditions," the report said the share of natural gas in the power sector has declined from 12 percent in 2012 to 8 percent in 2016, a decline that's expected to continue through the end of the decade.

Shell's move out away from the aviation sector aligns with CEO Ben van Buerden's announcement in first quarter results of a divestment strategy that could eventually pass the $20 billion mark.

The Dutch supermajor maintains a notable presence in the aviation fuels business, announcing last week that it started supplying fuel for the main airport in Brussels.

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