Royal Dutch Shell has agreed to sell most of its Canadian oil sands assets for $8.5 billion, the latest international oil major to withdraw from the costly projects, which are among the most carbon heavy.
Shell is trying to sell assets totalling $30 billion to cut debt following its $54 billion acquisition of BG Group and is under investor pressure to mitigate climate change risks.
As well as revealing the Canadian oil sands sale, Shell also said today that 10% of directors' bonuses will now be tied to how well it manages greenhouse gas emissions in refining, chemical and upstream.
Analysts welcomed the deal, under which Shell has agreed to sell its existing and undeveloped Canadian oil sands interests to Canadian Natural and to cut its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%.
Shell is also buying half of Marathon Oil Canada Corporation which brings the deal's value to Shell to $7.25 billion and its divestment plan total to around $20 billion as it works towards its target of $30 billion by late 2018.
Other oil firms including Exxon Mobil, Conoco Phillips and Statoil have written down or sold their Canadian oil sand assets.
Shell said it would remain as operator of the AOSP Scotford upgrader and the Quest carbon capture and storage project.
The company said it would also replace earnings per share in directors' long-term incentives with free cashflow, saying its disposals programme had made it a more important metric.
In its annual report, Shell said its CEO Ben van Beurden saw his pay jump 60% to €8.263m in 2016, the year he pulled off the BG purchase.
