Qatar Buys Major Stake in Oil Giant Shell

Source: Reuters 5/11/2012, Location: Middle East

Gas-rich Qatar is ploughing more of its commodity wealth back into the sector with the purchase of a major stake in Royal Dutch Shell, while also reportedly eyeing a chunk of Italian oil major ENI. A Shell spokeswoman confirmed the purchase while declining to detail its size but the Middle East Economic Survey (MEES) reported earlier that Qatar's sovereign wealth fund (QIA) was looking at a 3-5 percent stake.

If Qatar did buy 5 percent, it would be just ahead of Black rock, which is currently Shell's biggest investor with 4.97 percent, according to Reuters data.

But British stock market rules require any party to disclose a holding of over 3 percent in a listed company so the absence of a statement from Qatar suggests its interest is below this level.

The Gulf nation's massive gas supplies have made it rich, allowing it to create a sovereign wealth fund that has been buying up assets, including stakes in listed companies, around the world.

"We are delighted to welcome the Qatar Investment Authority as a long term and major shareholder in Shell, and particularly given our excellent strategic relationship with the Qatari state," the spokeswoman said in an emailed statement.

Shell operates multi-billion dollar natural gas projects in Qatar.

Shell's London-listed "A" shares rose 1.1 percent to trade at 20.74 euros by 1526 GMT, against a 0.4 percent rise in the STOXX Europe 600 Oil and Gas index .

Eni, whose shares traded up 1.9 percent at 16.89 euros, had no comment on the MEES report that Qatar was negotiating a stake in it.

Two analysts said the Qatar fund might be interested in buying the ENI stake of around 3.4 percent that state-controlled finance company CDP could sell to help fund its acquisition of a stake in transmission operator Snam from Eni.

The CDP and the Italian treasury own just over 30 percent of Eni and annulment of the group's treasury shares would increase their stakes.

A source close to the matter said a series of sovereign funds had met with CDP to discuss a possible stake in Eni.

"The plan to separate Eni from Snam involving Eni's annulling treasury shares and the CDP selling the excess stake it would get is in pole position among the options on the government's agenda," the source said.

Prime Minister Mario Monti had a meeting with the Emir of Qatar in Rome in April. Monti told reporters at the end of that meeting that Qatari institutions had shown interest in long-term investments in Italy.

In Italy, investors must inform the market regulator Consob when they buy stakes of more than 2 percent in a listed company.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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