Royal Dutch Shell offloads Australian aviation fuel business in £200m deal with Viva Energy

 
Francesca Washtell
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(FILES) This file picture taken on Janua
Shell's upstream activities in Australia will be unaffected by the aviation arm sale (Source: Getty)

Royal Dutch Shell has signed an agreement to sell its Australian aviation business to Viva Energy for around $250m (£200m).

Viva Energy, which is controlled by European energy trader Vitol Holdings, bought Shell's other downstream activities in Australia in 2014 and sells Shell-branded fuels and lubricants.

The company will "continue to supply aviation customers with Shell-branded fuel under existing contracts", Shell said in a statement.

Read more: We'll squeeze out every drop, says Shell boss

The deal is expected to complete by mid-next year, subject to regulatory approval, and employees of Shell aviation Australia will keep their jobs with the company as it transfers to its new ownership.

Shell's upstream operations in Australia, which include exploration, production and gas commercialisation, will not be affected by the sale, the company said.

Read more: Shell swings to profit but remains cautious on low oil prices

The company's share price was flat on the announcement, rising 0.2 per cent to 2.180p.

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Showa Shell sale

Shell also announced this morning that it has completed the sale of another downstream asset – a 31.2 per cent shareholding in Showa Shell to Idemitsu Kosan, following antitrust approval from the Japan Fair Trade Commission.

The deal was worth approximately $1.4bn.

John Abbott, Shell Downstream Director, said: “Shell has enjoyed a long and valuable partnership with Showa Shell since the year 1900. I would like to thank chief executive Tsuyoshi Kameoka, the management and the board of directors for their leadership and support, as well as those leaders who have preceded them over the last century. I wish the company success and look forward to seeing the commercial linkages and a new relationship between our two companies over the coming years.”

Last week, Shell announced its finance chief Simon Henry will step down in March after 30 years with the blue-chip oil major.

In August, the company divested $425m plus royalty interests in a cluster of Gulf of Mexico assets.

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