THE WALL STREET JOURNAL: Complexity Of LPG Deal Could Delay Divestment -Shell Exec: “Royal Dutch/Shell Group still wants to divest its liquefied petroleum gas business this year, but the complexity of the transaction could push the timing back until late 2005” (ShellNews.net) Posted 11 Feb 05

DOW JONES NEWSWIRES

HOUSTON (Dow Jones) --Royal Dutch/Shell Group (RD,SC) still wants to divest its liquefied petroleum gas business this year, but the complexity of the transaction could push the timing back until late 2005, a senior executive said Wednesday.

A transaction will take time because Shell will need to separate LPG from the company's other businesses in each country, said Rob Routs, Shell 's executive director for downstream. The unit, Shell Gas LPG, currently operates in 60 countries, according to a company Web site.

"The problem is, it's integrated into the national businesses," Routs told Dow Jones Newswires in an interview. "We have to actually carve them out as legal entities, and that's a long process.

"We still hope to get them sold this year," said Routs, a member of Shell 's Committee of Managing Directors.

There has been talk of a deal ever since Shell disclosed in September that it received an unsolicited offer. The buyer in such an acquisition, potentially worth more than $3 billion, could be a financial partnership or another oil company, sources recently told Dow Jones.

At an investor meeting in London last week, Shell executives said the company plans $12-$15 billion in divestitures over the next three years. At the same time, the company is ramping up its exploration and production campaign in an effort to improve its performance at replacing production with new reserves.

-By John M. Biers and Jessica Resnick-Ault, Dow Jones Newswires; 713-547-9214; john.biers@dowjones.com