Dec. 6 (Bloomberg) -- Royal Dutch Shell Plc jumped the most in more than 19 months in London after Europe’s largest oil company ended plans to build a gas-to-liquids plant in the U.S.
The shares gained 2.6 percent to 2,065.5 pence at the close. That was the largest increase since April 26 last year.
The company, based in The Hague, yesterday said it halted plans to build a $20 billion plant in Louisiana, which would have used natural gas to produce 140,000 barrels a day of liquid fuels.
“We are encouraged that the plans for a project that we saw as very capital intensive, high risk and inappropriate for a business region that is already overcapitalized will now be confined to collecting dust on a shelf in The Hague,” Lucas Herrmann, a London-based analyst at Deutsche Bank AG, wrote today in an e-mailed report.
Shell, which is gearing up to sell about $15 billion of assets, has been under scrutiny from investors because of its record $45 billion spending on projects and acquisitions this year. Chief Executive Officer Peter Voser, who steps down at the end of the year to be replaced by Ben van Beurden, said the decision showed the company’s capital discipline.
“We are making tough choices here, focusing our efforts and capital on the most attractive opportunities in our world-wide portfolio, to add value for shareholders,” Voser said yesterday in a statement.
European oil and gas stocks are showing the biggest gains since Oct. 29. The benchmark Stoxx Europe 600 Oil & Gas Index rose 1.1 percent, stopping a five-day slide.
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