UPDATE 1-Shell sells stakes in Australian gas project for $1.14 bln

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LONDON, Jan 20 (Reuters) - Oil major Royal Dutch Shell

RDSa.L said on Monday it had agreed to sell stakes in a gas project in Western Australia for $1.14 billion as part of a drive to improve return on investment.

Shell is selling an 8 percent stake in the Wheatstone and Iago gas fields and a 6.4 percent stake in the related Wheatstone liquefied natural gas project to the Kuwait Foreign Petroleum Exploration Company, a partner in the project.

"We are making hard choices in our worldwide portfolio to improve Shell's capital efficiency," Shell's chief executive Ben van Beurden, who took over two weeks ago, said in a statement.

Shell said last year that it would step up disposals "significantly" in 2014 and 2015 to keep cash flowing in.

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The company issued a "significant" profit warning on Friday, detailing across-the-board problems, which analysts said would increase pressure on the company to keep a tighter control on costs. News Search ID:nL5N0KR0H3

Shell, the world's number-three among investor-controlled energy firms, and its oil industry peers are facing increasing investor pressure to hold down spending as costs rise and prospects for oil prices wane.

"Shell will remain a major player in Australia's energy industry. However, we are refocusing our investment to where we can add the most value with Shell's capital and technology," van Beurden added.

U.S. oil firm Chevron CVX.N is the controlling partner in the Wheatstone project.

(Reporting by Sarah Young; Editing by Mark Potter and Dale Hudson)

((sarah.young@thomsonreuters.com)(+44 20 7542 1109)(Reuters Messaging: sarah.young.thomsonreuters@reuters.net))

Keywords: SHELL AUSTRALIA/SALE