Vitol Said to Weigh Bid for Shell’s Australian Downstream Assets

Vitol Group, the world’s largest independent oil trader, is considering a bid for some of Royal Dutch Shell Plc (RDSA)’s Australian downstream operations, according to two people with knowledge of the matter.

Geneva-based Vitol is studying assets including storage terminals, filling stations and an oil refinery in Geelong, south of Melbourne, said the people, asking not to be identified as the details are private. Buyout firm TPG Capital and a group led by Macquarie Group Ltd. (MQG) are also weighing bids for some of the assets, two people familiar with the situation said.

Shell, Europe’s biggest oil company, is stepping up asset sales after spending a record $45 billion on projects and acquisitions last year. Its earnings from refining and marketing dropped by almost half to $892 million in the three months to September, the company said Oct. 31.

The Hague-based company’s Australian unit said in April it would sell the Geelong refinery to focus on larger plants, such as the Pulau Bukom refinery in Singapore. The Geelong facility, which processes about 120,000 barrels of oil a day, may be converted to a fuel import terminal if a sale isn’t completed, according to its website.

Shell also has a network of about 900 filling stations in Australia, two-thirds of which are operated by its retail partner Coles Group Ltd., owned by Wesfarmers Ltd. (WES)

Spokesmen for Shell, Vitol, Macquarie and TPG declined to comment. Shell plans to sell about A$3 billion ($2.7 billion) of Australian assets and is talking to parties including TPG and a group that includes Macquarie, the Australian Financial Review reported today, citing unidentified people.

African Purchase

Shell is being advised by Bank of America Corp. on the sale, the people said.

Vitol agreed in 2011 to buy the bulk of Shell’s downstream business in 14 African countries, alongside Africa-focused private equity firm Helios Investment Partners LLP, for about $1 billion. The Swiss company owns and operates refineries in the United Arab Emirates, Switzerland and the Netherlands with a refining capacity of about 150,000 barrels a day, according to its website. It also has a storage terminal venture with facilities in 14 countries.

Australia’s Macquarie Capital agreed in August to buy 45 percent of Singapore’s Helios Terminal Corp. from Oiltanking GmbH for an undisclosed sum, the closely-held German company said Aug. 12. Oiltanking bought the terminal on Jurong Island, which comprises 18 storage tanks, from Chemoil Energy Ltd. for $285 million a year ago.

To contact the reporters on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net; Brett Foley in Melbourne at bfoley8@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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