Making Shell more palatable as an acquisition target?
From a regular contributor
I think the Ho Ho line may be one of the assets being sold as part of the IPO announced today.
On another subject completely….the Chinese have done a large scale LNG deal with BP and at the same time announced that their cooperation with Shell will continue. Shell promotes itself as the big LNG player, so why is this LNG deal going to BP? In spite of all the spin, Shell and CNOOC agreeing to continue cooperation is hardly an earth shattering event, so why does it justify so much coverage?
The implications might well be a further indication of an upcoming merger….or perhaps a takeover along the lines of your recent leaked document, in which almost all of the significant board positions went to BP.
Given the liabilities/exposure of owning pipelines, the IPO might be a way of making Shell more palatable as an acquisition target.
Changes to Ireland’s licensing terms for oil and gas
News Release – Issued by Shell to Sea
June 18th , 2014 – For immediate release
CHANGES TO OIL/GAS LICENSING TERMS ‘COSMETIC’
State continues to rely primarily on corporation tax to extract revenue
The changes to Ireland’s licensing terms for oil and gas announced by Pat Rabbitte today (18th June 2014) are cosmetic and will do little to address the State’s mismanagement of its valuable resources, according to Shell to Sea.[1]
Shell to Sea spokesperson Maura Harrington said: “These changes are cosmetic, Ireland will continue to rely almost exclusively on a tax on profits as a means of extracting revenue from the oil and gas it has given to private companies. We have seen recently how creative accounting has resulted in corporations such as Apple paying almost no tax on profits in Ireland .” [2,3]
Maura Harrington continued “The changes are not retrospective, so the best areas of Ireland’s territory for which licenses have already been given out will continue to be subject to the old terms .”
Terence Conway stated “While the Government has been forced to respond to years of pressure from campaigners on this issue, the changes only give the illusion that the state will get a reasonable amount of revenue, while still only guaranteeing 5% of the value of the resources.”
The Wood Mackenzie report admits “The changes we recommend should not alter the overall perception of Ireland as a ‘high risk / high reward’ country for exploration” and also states that Wood Mackenzie believes that the recommended system will greatly “improve the perception” of the fiscal terms .” [4]
Terence Conway continued “As could be expected from a company so closely linked with the oil industry, the Wood Mackenzie report still recommends continuing to give the oil companies control over and the vast majority of the profits, from whatever oil and gas is found. The State will still take no share in production, and will have no control over what happens to our oil and gas, e.g. whether it is landed in Ireland or supplied to the Irish market .” [5]———
NOTES TO EDITORS
For verification and further comment contact:
Terence Conway: 086 0866264
Maura Harrington: 087 9591474
Maura Harrington: 087 9591474
RELATED
Oil and gas tax regime faces reform: Belfast Telegraph 18 June 2014
Shell Midstream applies for U.S. IPO
(Reuters) – Royal Dutch Shell: Wednesday 18 June 2014
* Files to raise up to $750 million
* Company formed by Royal Dutch Shell as an MLP
(Reuters) – Shell Midstream Partners LP, a master limited partnership formed by Royal Dutch Shell Plc, filed with U.S. regulators on Wednesday to raise up to $750 million in an initial public offering of common units.
The master limited partnership (MLP) structure allows companies to raise money in the stock market while having income taxed only at the unit holder level, avoiding corporate income taxes.
Shell Midstream said in its IPO prospectus it plans to use proceeds from the offering to acquire stakes in some pipeline companies from Shell Pipeline Company LP, a U.S. unit of Royal Dutch Shell, in exchange for cash distribution.
Shell Midstream’s assets will include a 43 percent stake in Zydeco Pipeline Company LLC, a 28.6 percent stake in Mars Oil Pipeline Company and a 49 percent stake in Bengal Pipeline Company LLC.
These companies own pipelines that run along the coasts of Texas and Louisiana and in offshore Louisiana. They also own pipelines that transport refined products from refineries on the Gulf Coast and southeastern United States.
Shell Midstream reported net income of $23.8 million on revenue of $36.1 million for the quarter ended March 31, on a pro forma basis, according to the IPO filing.
Offerings from oil and natural gas companies constituted 23 of the more than 250 IPOs over the past 12 months.
Barclays and Citigroup are underwriting Shell Midstream’s IPO, the Houston, Texas-based company said in its filing with the U.S Securities and Exchange Commission. (bit.ly/1iG7z6c)
The company intends to list its common units on the New York Stock Exchange under the symbol “SHLX”.
The filing did not reveal how many shares the company planned to sell or their expected price.
The amount of money a company says it plans to raise in its first IPO filing is used to calculate registration fees. The final size of the IPO could be different. (Reporting by Amrutha Gayathri in Bangalore; Editing by Saumyadeb Chakrabarty)
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