HONG KONG/LONDON (Reuters) - BG Group plc BG.L, which is being acquired by Royal Dutch Shell plc (RDSa.L), has put up for sale its 22.2 percent stake valued at around $1.2 billion in Thailand’s huge Bongkot offshore gas field, people familiar with the matter said.
The move represents the first major asset sale planned by BG since Shell agreed to buy the British company in April. The sale process required a green light from Shell, the people said.
BG has been exiting some of its Asian assets and last year sold its Australian gas pipeline business for $5 billion. Some bankers said its decision to sell the Thai gas field points to Shell’s desire to stay focussed on its core assets.
“The BG sale would indicate that eventually Shell doesn’t want to take on Thailand exposure, despite Bongkot being a significant operating field,” one senior oil and gas banker said.
Thailand accounted for about 6 percent of BG’s global gas production in 2014. Shell doesn’t operate any gas fields in the Southeast Asian nation.
Shell still owns a $2.5 billion stake in Australian oil and gas producer Woodside Petroleum (WPL.AX) and bankers widely expect it to trim that position, as the Anglo-Dutch company focuses on areas such as deepwater drilling off places such as Brazil.
BG has hired Morgan Stanley (MS.N) to run the Bongkot sale process and wants to close the deal by the end of this year, another person familiar with the matter said.
The Bongkot offshore gas field meets about a fifth of Thailand’s domestic gas demand. State Thai oil company PTT Exploration and Production Pcl (PTTEP.BK) has a 44.4 percent stake in the field, while France’s Total (TOTF.PA) owns the remaining 33.3 percent stake.
BG declined to comment on the Thai sale but said it is free to make strategic moves until the Shell takeover closes. Morgan Stanley also declined to comment. The sources declined to be identified as the information is not public.
Global energy majors have been forced to cut costs, slash project spending, and sell assets to reassure investors they can withstand an extended period of lower oil prices. In July, Shell announced plans to axe 6,500 jobs this year and raise $50 billion from asset sales between 2014 to 2018, after second-quarter profit fell 37 percent.
When contacted, PTTEP’s Chief Financial Officer Penchan Charikasem told Reuters the company would be interested in buying BG’s stake if it is put on the block.
“We are particularly keen on assets close to home and in Southeast Asia,” she said.
France’s Total declined to comment.
Reporting by Denny Thomas in HONG KONG, Ron Bousso in LONDON and Sonali Paul in SYDNEY; Additional reporting by Khettiya Jittapong in BANGKOK and Bate Felix in PARIS; Editing by Lisa Jucca and Muralikumar Anantharaman