CG Carlyle Group Inc

By Maria Kunle and Ian Walker

LONDON--Oil major Royal Dutch Shell PLC (RDSB.LN) said Monday it has now sold its Butagaz liquefied-petroleum-gas business in France to DCC Energy Ltd. for EUR464 million ($512.78 million), following an approach made in May.

Shell said its other businesses in France--aviation, commercial fleet, lubricants, retail and bitumen--aren't affected by the transaction.

Separately, Shell said it has sold its 75% interest in Tongyi Lubricants in China to Huo's Group and Carlyle Group LP for undisclosed terms, following regulatory approval.

"Both divestments are consistent with Shell's strategy to concentrate its downstream footprint on assets and markets where it can be most competitive, and to divest its LPG businesses world-wide," the company said.

Shell announced in May that it had received an offer from DCC. In July, Shell Chief Financial Officer Simon Henry separately announced a cost-reduction program, including the planned elimination of 6,500 jobs.

"We're not surprised by today's completion," said Sanford C. Bernstein Research analyst Teng Ben. "Last decade, Shell was very active in diversifying its business, and now it's divesting less-profitable assets of them." She said she expects such divestments to continue.

Shell's asset sales come as it is contending with losses driven by the persistently low price of oil, as benchmark Brent crude remains under $50 a barrel. Last week, the Anglo-Dutch company reported a third-quarter loss of $6.1 billion on a current-cost-of-supplies basis, compared with a $5.3 billion profit in the same period of 2014.

The company is pulling back on expensive projects, having halted exploration activities in Alaska and stopped the construction of the Carmon Creek in-situ oil project in Canada. "These are difficult but impactful decisions," Shell Chief Executive Ben van Beurden has said of the retrenchment, pointing that it will help company to become as a result "more focused and competitive."

Similar motivations are behind Shell's pending $70 billion takeover of BG Group PLC, which Mr. van Beurden said would help the company focus on "fewer and more profitable themes," such as deep water and integrated gas.

The hard times aren't limited to Shell: British oil giant BP PLC, which is British oil giant, on Tuesday said its third-quarter replacement-cost profit fell more than 60% to $1.23 billion from $2.39 billion.

Shell shares were up 0.9% to 1,715 pence in London trading. Bernstein is "positive" about the company's shares, Ms. Ben said, as sales of less-profitable assets should be a "springboard" for improving Shell's strategic portfolio.

Write to Maria Kunle at maria.kunle@wsj.com and Ian Walker at ian.walker@wsj.com

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(END) Dow Jones Newswires

November 02, 2015 12:13 ET (17:13 GMT)

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