Royal Dutch Shell plc (ADR) (RDS.B), PetroChina Company Limited (ADR) (PTR): Don’t Miss the Chance to Fuel Your Portfolio with These Gas Giants

BHP Billiton Limited (ADR) (NYSE:BHP) wants to sell its non-core assets, the Browse LNG project, and focus more on its core mining business and to cut costs. The mining giant also announced a divestiture program including the sale of its major Gregory-Crinum coal operation in Queensland, Australia, and its 80% stake in the Ekati diamond mine in Canada. The total divestiture program could raise around $25 billion as it plans to sell 10 major businesses in coming years. With these proceeds, it will reduce its debt, focus on improving its mine productivity, and commence new exploration activities.

PetroChina Company Limited (ADR) (NYSE:PTR) is selling its minority stake in various plants to raise cash for its overseas acquisition targets in Australia, Central Asia, the Middle East, North America, Africa and Asia, and to offload its debt burden. It will sell its minority stake in the West-East pipeline 2, West-East pipeline 3, and stake in Tarim Basin and Xinjiang’s oil and gas fields. The company had debt of $82 billion at the end of 2012, a marked increase from $57 billion in 2011. With the selling of stakes between 20%-40%, PetroChina is expected to raise cash between $30 billion to $61 billion. Therefore, the cash generated will strengthen the company’s balance sheet and will generate good returns for the investors.

Conclusion:

Royal Dutch Shell plc (ADR) (NYSE:RDS.B) is expecting growth from its Gulf of Mexico portfolio. The company is also expecting growth from its exploratory well at Vicksburg field and an ultra deepwater project in Stones field, in Gulf of Mexico.

The proceeds from the sale of minority stakes will allow PetroChina Company Limited (ADR) (NYSE:PTR) to gain presence as it expands overseas. This will help the company accomplish its production targets and generate maximum revenue.

The proceeds from the divestiture program will reduce Billiton’s debt, and it can further use these proceeds to improve its mine productivity as well as exploration activities.

Looking at the growth prospect in all the three companies, I recommend a buy.

The article Don’t Miss the Chance to Fuel Your Portfolio with These Gas Giants originally appeared on Fool.com and is written by Shweta Dubey.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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