Shell to Divest About $1 Billion of Refining, Marketing Assets in Africa
Royal Dutch Shell Plc, Europe’s biggest oil company, will sell its retail fuels business in 14 African countries for $1 billion as part of a plan to streamline its marketing operation worldwide.
Vitol Group and Helios Investment Partners LLP, an Africa- focused private equity firm, will form a joint venture to take control of most of Shell’s fuel marketing operations on the continent, Geneva-based Vitol said in a statement today. Shell may put assets from five more countries into the venture.
“We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint” while continuing to provide products under the Shell brand to customers in Africa, Mark Williams, Shell’s downstream director, said in the statement.
Hague-based Shell is targeting asset sales of as much as $5 billion this year, Chief Executive Officer Peter Voser said an earnings report on Feb. 3. The company has sold about $30 billion of assets worldwide over the last five years.
Vitol, the world’s largest independent oil trader, and Helios will take control of Shell’s business fueling retail, commercial, aviation and marine customers as well as lubricants and liquefied petroleum gas in the countries. Shell will hold a 20 percent stake in the new company.
‘Growth Opportunities’
“Combining Vitol’s world class supply expertise and Helios’ deep understanding of the African operating environment with the Shell brand will create significant new growth opportunities,” Tope Lawani, managing partner of Helios, said in the statement.
The agreement covers Shell’s businesses in Morocco, Tunisia, Ivory Coast, Egypt, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius. The Egypt operations exclude lubricants.
Another venture, in which Shell will hold a 50 percent stake, will run Shell’s lubricants blending plants in seven countries.
Shell is considering whether to sell to the venture its businesses in Namibia, Botswana, Togo, Tanzania and La Reunion may be sold to Vitol and Helios in the future, according to the statement.
The agreement, subject to regulatory approval, would be implemented in phases by the end of the first half of 2012.
Not included in the agreement are Shell’s fuels unit in South Africa, its lubricants business in Egypt, its oil exploration programs, its trading operation and its liquefied natural gas assess.
To contact the reporter on this story: Maria Ermakova in London at mermakova@bloomberg.net
To contact the editor responsible for this story: Maria Ermakova at mermakova@bloomberg.net
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