Woodside Petroleum shares could receive a lift if oil and gas giant Shell offloads its stake in the company for almost $8 billion.
Royal Dutch Shell, a joint venture partner in Woodside's Browse project in Western Australia, has previously indicated it will begin an asset sales program under the stewardship of its new chief executive Ben van Beurden.
JP Morgan analysts in Europe predict Shell could reap $US6.95 ($A7.82) billion by selling its 23.1 per cent interest in Woodside.
They say it is feasible that Shell could embark on an overall divestment program bringing in between $US25 to $US30 billion during 2014/15.
RBC Capital Markets analyst Andy Williams said any sale would most likely be done in tranches, but it was unclear when it might occur.
"Shell has indicated previously that they're not a long term holder so I think it probably overhangs the share price from an investor's point of view," Mr Williams said.
"Reducing it to below 10 per cent or divesting it in its entirety is probably beneficial for Woodside in terms of the market investment opportunity."
Some institutions have been cautious about investing in Woodside, fearing a Shell selldown could lead to a discount in the company's share price.
Shell has progressively reduced its stake in Woodside since its $10 billion takeover bid for the company was rejected by Treasurer Peter Costello on national interest grounds in 2001.
Shell's recent underperformance has also fuelled speculation about imminent assets sales.
Still, analysts say a move by Shell to exit the Woodside share register would be unlikely to affect the Perth-based company's growth ambitions in WA, or further afield in Israel.
Shell has recently been working on a floating LNG (FLNG) option with Woodside for the Browse offshore gas project.
But Mr Williams says Woodside's FLNG ambitions and an exit by Shell are separate issues.
"They'll look at their direct project investments on a stand alone basis," he said.
It comes a day after Woodside said it will push ahead with plans to jointly sell gas from its proposed Browse project despite a Japanese partner terminating a purchase 1.5 million tonne liquefied natural gas deal.
Woodside and its joint venture partners recently decided to pursue a floating LNG option for Browse and will make a final investment in the third quarter of 2015.
Shares in Woodside dropped 43 cents, or 1.1 per cent, to $38.13 on Friday.
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