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Woodside Petroleum Chairman Michael Chaney. Image courtesy of Youtube.

Shareholders of Australia-based upstream company Woodside Petroleum voted Thursday to block a 78.3 million share buyback from Shell Energy Holdings Australia worth US$2.68 billion.

The resolution needed a 75 percent majority to pass.

Only about  70 percent of eligible proxy and direct votes were cast in favor of the buyback and 28.7 percent against.

Shell was looking to sell down its stake from 23.1 percent to 4.5 percent as part of a larger global assets sale, Reuters said.

Shell had already sold 9.5 percent of its Woodside stake to institutions for US$3.1 billion (A$3.24 billion).

The failed buyback would have brought the total proceeds to Shell to US$ 5.29 (A$5.7 billion).

Woodside planned to buy back and cancel half of the share parcel as way to smooth the impact of Shell’s sell-down on other Woodside shareholders, Reuters said.

Shell is reviewing options for dealing with its remaining 13.6 percent holding in Woodside.

Shell’s Chief Financial Officer Simon Henry said Thursday that the failed buyback would not stop the company from reaching its target of selling US$15 billion in assets.

Shell tried to take over Woodside, Australia’s largest independent oil and gas company, in 2001 but its bid failed when Australia’s then Treasurer Peter Costello blocked the deal.

The buyback was opposed by some investors because they said it didn’t treat all shareholders equally and would have given Shell access to US$929 million (A$1 billion) in tax credits.

“The buyback was merely an efficient mechanism to assist with the exit of Shell from the register and the only option available to achieve our aim,” Woodside Chairman Michael Chaney said.