Time to Buy the Beaten-Down Emerging Market ETFs?
Royal Dutch Shell plc RDS.A recently divested its entire stake in Oman’s Mukhaizna oilfield to India’s largest oil company, Indian Oil Corporation. The European oil giant sold its entire 17% interest in the oil field to IOCL Singapore PTE Ltd — a wholly-owned subsidiary of Indian Oil — for a total consideration of $329 million.
The majority stakeholder in the Mukhaizna field is Occidental Mukhaizna LLC, a subsidiary of Occidental Petroleum Corporation OXY, which owns 45% stake. Other partners in the field include Oman Oil Company, Liwa Energy Limited, TOTAL E&P Oman, a subsidiary of TOTAL S.A. TOT, and Partex (Oman) Corporation, each holding 20%, 15%, 2% and 1% stakes, respectively.
Mukhaizna oilfield, being the largest oilfield in Oman, accounts for 13 per cent of the total oil production of 120,000 barrels per day in the nation. The deal marks the first upstream acquisition of Indian Oil in Oman that is likely to enhance its global footprint and growth opportunities in the Middle East region, along with bolstering India’s energy security.
The move will help Shell proceed with its $30 billion divestment program. The deal provides the company with a major uplift in its drive to decrease debt, following the acquisition of BG Group for $47 billion. The divestment is expected to reduce the company’s cost and enhance cash flow, as well as return to capital. The deal will also help the company to upgrade and streamline its upstream portfolio.
With Shell already wrapping up divestment deals worth more than $23 billion, it remains focused to meet its target by 2018. Further, the company announced asset disposals amounting to around $2 billion and talks for prospective transactions of additional $5 billion divestment deals are already in advanced stages.
Headquartered in Netherlands, Shell is one of the largest integrated energy companies engaged in the production, refining, distribution, and marketing of oil and natural gas. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Royal Dutch Shell PLC Price
Royal Dutch Shell PLC Price | Royal Dutch Shell PLC Quote
Meanwhile, one can consider PetroChina Company Limited PTR, which is a Zacks #2 (Buy) Ranked player in the same industry. PetroChina’s revenues and earnings are expected to witness a year-over-year increase of 7.17% and 48.03%, respectively, in 2019.
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