FORBES/AFX News Limited: Shell declines comment on reported asset swap with BG: Monday 22 August 2005

LONDON (AFX) - The Royal Dutch Shell PLC has declined to comment on a weekend report claiming it is considering a North Sea asset swap arrangement with BG Group PLC.

'We have no comment on that,' said a Shell spokeswoman.

According to an unsourced article carried by the Business newspaper, Shell and BG are in advanced discussions to exchange certain gas producing fields in the North Sea.

BG is looking at handing Shell some of its 22 pct stake in the giant Buzzard field, the largest UK gas find in a decade, in exchange for a share of Shell's interest in the Ormen Lange field.

The news came weeks after Shell's asset swap deal with Russian gas monopoly Gazprom.

Under a preliminary arrangement, Gazprom will take a 25 pct stake in Shell's Sakhalin II project in Russia. Shell, in return, will get a 50 pct interest in Gazprom's Zapolyarnoye field in Siberia.

Shell has earlier admitted that Sakhalin II has been 10 bln usd overbudget, doubling the cost of the project to 20 bln usd and delaying its start up by nearly a year to the summer of 2008.

Separately, Shell also said the sale of its liquefied petroleum gas business is progressing as planned.

'The process is underway,' said the company spokeswoman, declining to name interested buyers.

The Sunday Telegraph reported that separate teams made up of CVC Capital Partners and Spain's Repsol, US-based Blackstone and UK's Permira, and Bain Capital and PAI Capital were bidding for the business, which is estimated to be worth around 3 bln usd.

Kohlberg Kravis Roberts, the US leveraged buyout fund, and Goldman Sachs Private Equity have teamed up to launch a joint bid, while Carlyle Group, the US private equity house, is bidding on its own, the newspaper said, without citing sources.

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