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Shell Inks Deal with CNOOC, Closes Woodside Stock Sale

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Integrated energy behemoth, Royal Dutch Shell plc (RDS.A) has entered into a global strategic alliance contract with Chinese oil giant, CNOOC Limited (CEO).

Per the agreement, both companies will share their resources for the development of potential upstream, midstream and downstream projects. Included in the deal, Shell will work together with CNOOC for exploring profitable projects all over the world with an aim to bring sufficient cleaner energy – energy from renewable resources, without polluting the environment − to China. Shell will also join CNOOC to explore liquefied natural gas (LNG) projects and deepwater upstream developments in places like Gabon and Brazil.

Separately, Shell declared the completion of the previously announced divestment of 78.27 million shares of Australian petroleum exploration and production company, Woodside Petroleum Limited. The stocks were sold at A$41.35 per share, and Shell will likely get the net proceeds by Jun 23, 2014.

Shell is one of the major integrated energy firms in the world with a large and diversified portfolio of development projects that offer attractive long-term opportunities, while CNOOC is one of the three leading oil companies in China and one of the largest independent oil and gas exploration and production companies of the world.

Both Shell and CNOOC currently carry a Zacks Rank #3 (Hold), implying that these are expected to perform in line with the broader U.S. market in the next one to three months.

Meanwhile, one can look at better-ranked players in the oil and gas integrated sector like Exxon Mobil Corporation (XOM) and Statoil ASA (STO). Both the stocks hold a Zacks Rank #2 (Buy).  

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