Vitol SA has announced that it is to buy Royal Dutch Shell’s Australian refinery and petrol stations for approximately US$ 2.6 billion (AUS$ 2.9 billion).
The acquisition includes the Geelong oil refinery south of Melbourne and its 870-site retail business, plus its bulk fuels, bitumen and chemicals business and part of the lubricants business. It does not include the aviation fuel business.
Shell is stepping up asset sales due to poor performance in refining and unprofitable shale investments in North America, according to Bloomberg. The company plans to sell approximately US$ 15 billion in assets through 2015 and has already announced deals in Australia, Brazil and Italy.
Reuters reports that this sale to Vitol puts Shell on track to meet the US$ 15 million target. Chief Executive Ben van Beurden said in a statement: “Australia remains important to Shell but we are making tough portfolio decisions to improve the company’s overall competitiveness”.
“Australia is a growing economy and we look forward to working with the management team to strengthen and grow the business”, Vitol President and CEO Ian Taylor said.
Vitol will keep the Geelong refinery in operation and plans to expand the Australian business as the economy grows. Mark Samter, a Sydney-based energy analyst at Credit Suisse Group AG, said: “Vitol believes they can source product more efficiently than the rest of the Australian market as highly competent traders”.
The firm will continue to sell gasoline under the Shell brand as part of the deal.
Edited from various sources by Emma McAleavey.
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