ROYAL Dutch Shell is listed on the London Stock Exchange. Several months ago I wrote that the chairman of the company had bowed to pressure from shareholders and announced a change of focus.
He committed to selling off projects that were draining current reserves for the prospect of generating future profits and concentrating on the here and now.
I suggested that this was a portent to the shelving of the Arrow Energy project on Curtis, in which Shell is a 50% partner - correctly, as it turned out.
Had events on Friday, August 1, had a different result, the Arrow project may well have been revisited sooner rather than later.
In its opinion, one of Shell's underperforming investments has been its decades-long major shareholding in Woodside Petroleum.
The fact is that it has been a mutually detrimental relationship according to the Woodside board, which regards Shell as a gigantic flea in the company's ear.
Especially since Shell trumpeted its dissatisfaction with its investment in 2010, when it hit the bourse with an Australian record share placement largely snaffled by institutional investors.
The Woodside board quite rightly thought that this negative take on the company would linger.
The board would have been pretty happy, I'd imagine, that Shell had sold down its holding to just 13.6% by last Friday week, having disposed of 9.5% earlier this year.
On that day, August 1, the Woodside board unleashed an audacious plan to buy back Shell's remaining shares.
They held a special, selective shareholders meeting in Perth to vote on the proposed buyback.
The invited shareholders, largely institutional investors, held 428 million shares among them and the requirement was that a 75% affirmative vote was needed for a successful buyback.
It fell just short, gaining 72% approval.
The significance for Gladstone is that under its new CEO, Shell has targeted a $15 billion sell-off of non-core assets.
A $2.88 billion buyback of Woodside shares would have put Shell on track to achieving this.
Whether the raising of this sort of cash and a huge bundle of franking credits that were part of the proposed deal would have brought the Arrow project on Curtis forward would, of course, have been dependent on whether Shell sees the project as core or non-core.
But it was a possibility.
Woodside shareholders will regret the failure, as their shares for the time being will continue to offer less than full value as the flea continues to feast in their company's ear.
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