ROYAL Dutch Shell has agreed to sell three quarters of its stake in its African refining and distribution business to its joint venture partners for $1bn (£616m) as part of its efforts to dispose of non-core assets, the oil major said yesterday.
Shell said remaining owners Vitol Group and Helios Investment Partners, which have upped their stake from 50 to 80 per cent by snapping up Shell’s holding, would continue to sell Shell products in 14 African countries including Egypt, Tunisia and Uganda.
The deal will be phased in during 2011 and into the first half of 2012, with Shell retaining a 20 per cent interest in the new joint venture structure.
“This is a good deal for our customers as well as for Shell,” said Shell downstream director Mark Williams. “We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint, and continue to provide the high quality Shell products that our African customers have come to trust and rely on over many decades.”
Shell sold $7bn of non-core assets during 2011 that took out 12 per cent of the firm’s refining capacity, according to its last results statement.
Shell is still in talks with Australian oil and gas producer Woodside about what it plans to do with its remaining 24 per cent stake, Woodside’s chief executive Don Voelte said yesterday.
Woodside was caught off-guard last November when Shell sold off one-third of its stake in the company.
“The chairman and I are working very constructively and professionally with them,” Voelte told analysts and reporters yesterday, playing down talk of bad relations between the two companies.