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 The Anglo-Dutch company has also picked Bank of America Merrill
Lynch and Morgan Stanley to work on proposed sales of assets,
according to the sources, noting that more banks could yet be added
to the line-up.
A Shell spokesman confirmed Lazard has been brought in under a new
mandate to advise its merger and acquisition team on the company's
divestment strategy. It also confirmed BofA Merrill Lynch and Morgan
Stanley have been appointed to work on some assets sales.
Lazard declined to comment. Morgan Stanley and BofA Merrill Lynch
were not immediately available to comment.Shell has announced plans
to sell $30 billion worth of assets between 2016 and 2018 in order
to finance the BG deal as well as maintain its dividend following a
sharp drop in oil prices since mid-2014.
"We don't have a broker relationship with any one bank. We choose
banks on project-by-project basis, on the basis of price and
suitability. We expect several banks to bid for and get transaction
mandates for our $30 billion asset-sale program," the Shell
spokesman said.
In a surprise move late last year, Shell's board turned to Lazard
for an independent review of the $50 billion BG acquisition as it
sought to allay shareholders' concerns over its merits in the face
of plummeting oil prices.
Lazard's latest role is a new mandate for the purely advisory player
which has no lending capacity and has kept a relatively low profile
in the oil and gas sector.
IDENTIFYING SALE CANDIDATES
Lazard will help identify suitable assets for sale and their
potential buyers.
Chief Executive Officer Ben van Beurden has said Shell's disposals
would initially focus on the refining, storage and retail divisions,
known as downstream, whose value has held up during the current
downturn.
Oil and gas production assets, known as upstream, are more likely to
be sold later once the oil price recovers, Shell has indicated.
Sources said Shell has decided "thematically" in which areas it
would divest, although it was yet to decide on specific assets
within them.
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Following the completion of the BG acquisition on Feb. 15, Shell
officials have been going over both companies' portfolios to
identify "core assets" and others that can be put on the block.
Shell divested $5.5 billion worth of assets in 2015, including a
refinery in Japan, North Sea assets and its retail business in
Norway.
INDEPENDENT REVIEW
The mandate is a coup for Lazard.
The U.S. outfit was not among the original banks on the BG deal,
which had BofA Merrill Lynch advising Shell, while Goldman Sachs and
boutique Robey Warshaw worked with BG.
Morgan Stanley, JP Morgan and Rothschild later joined the roster.
Boutiques have managed to compete with major Wall Street banks by
touting the independence of their advice, since they do not offer
services such as lending and are usually paid regardless of whether
the deal happens.
Lazard ranked sixth globally for M&A advisory last year, placing it
just behind Citi, according to Thomson Reuters data.
The advisory firm earned $919 million in fees and captured a 3.5
percent market share, according to Thomson Reuters data, helped by
roles on deals including the $46 billion merger of H.J. Heinz and
Kraft Foods.
(Reporting By Freya Berry and Ron Bousso; additional reporting by
Sophie Sassard; Editing by Keith Weir)
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