Shell announced today it is offloading the remaining 50 per cent of its joint venture with leading chemical manufacturing company Saudi Basic Industries Corp (SABIC).
The sale of its petrochemicals joint venture, known as SADAF, for $820m (£662.4m) comes as the latest in a string of business disposals, which include its Malaysian oil refining company and Australian aviation business last month.
The agreement will allow SABIC to optimise operations of and invest further into the Saudi venture, which was not due to expire until 2020.
Yousef Al-Benyan, SABIC vice chairman and chief executive, said, “With this transaction SABIC is looking to capitalise on synergy opportunities of SADAF with other affiliates, and improve its operation and profitability.”
The divestment will allow Shell to focus on "downstream activities and make selective investments" that will target areas where the company is most competitive, Shell said in a statement.
Graham van’t Hoff, executive vice president of chemicals for Shell, said: "We’re proud to have established together one of the first petrochemical ventures in Saudi Arabia – it has grown substantially since the start, in 1986.
"We will continue to explore potential future opportunities with SABIC."
The joint venture includes six world-scale petrochemical plants with a total output of more than 4m metric tons per year.
The transaction, which is subject to regulatory approval, is expected to be completed later this year.