Photographer: Chris Ratcliffe/Bloomberg

Shell to Cut Bidders to Three for Argentina Assets

  • Luksic, Trafigura and Vitol said to be among bidders
  • YPF, PetroChina and Pluspetrol also said to be on bidding list

Royal Dutch Shell Plc plans to focus on three bidders this month for its downstream oil assets in Argentina after receiving eight non-binding offers of $1 billion to $2 billion, people with knowledge of the matter said.

The shortlisted bidders will enter the second phase of the sales process, which includes an oil refinery and a network of gasoline stations, in the next two to three weeks, according to the people, who asked not to be named as the talks are private.

Shell put the plant near Buenos Aires and about 600 refueling stations up for sale earlier this year after a strategic review under a $30 billion divestment plan to reduce debt following its biggest-ever acquisition of BG Group Plc last year. The Anglo-Dutch company is working with Credit Suisse Group AG on the divestment in Argentina, where the oil and gas exploration and production assets aren’t included in the review as shale investments remain a priority, the company has said.

A spokeswoman for The Hague-based Shell declined to comment on the sales process.

Potential Buyers

Chile’s Grupo Luksic has been among the most appealing bidders, according to people with knowledge of those talks. Shell sold its fuel business in Chile to Quinenco SA, the holding company controlled by the Luksic family, in April 2011. Quinenco’s Empresa Nacional de Energia Enex SA continues to use the Shell brand at its gasoline stations in the country.

Shell, which is two-thirds of the way through its global divestment plan, is asking bidders to keep the brand at the fuel stations in a sign that it doesn’t want to exit Argentina, where it plans to reinforce oil and gas shale exploration.

Trafigura and Vitol, among the world’s biggest oil trading firms, have also submitted bids, the people with knowledge of the talks said.

Raizen Combustiveis SA, an independently operated joint venture between Shell and Brazil’s Cosan SA, was also among the companies putting in an offer for the Argentine assets, the people said. Raizen, formed in 2011, controls more than 6,000 Shell-branded gas stations and distributes about 25 billion liters (6.6 billion gallons) of fuel in Brazil, accounting for about a quarter of the market, according to the company’s website.

Spokesmen for Trafigura and Raizen declined to comment, while representatives for Vitol and Grupo Luksic didn’t immediately return requests for comment.

YPF, PetroChina

Among bidders that may be cut from the list are YPF SA, Argentina’s biggest gasoline distributor and crude driller, the people said. Energy Minister Juan Jose Aranguren said last month the company may not get regulatory approval for an acquisition given its 60 percent market share in the retail gasoline sector. The company put in an offer above $1 billion as it seeks to prevent the entry of global traders to the fuel-distribution business in Argentina, a person close to the Buenos Aires-based company said.

PetroChina Co., China’s biggest oil and gas explorer, Argentina’s Pluspetrol SA and Southern Cross Group, a Latin America-focused private equity firm, are among other bidders, the people said.

Spokesmen for YPF, Pluspetrol and Southern Cross declined to comment. PetroChina’s press department didn’t immediately respond to an email sent outside normal business hours in Beijing.

— With assistance by Eduardo Thomson, and Gerson Freitas Jr

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE