Shell says selling 51pc stake in Shell Refining Company to Hengyuan

Security of supply to retail and commercial customers in Malaysia assured, says Shell. — Reuters file pic
Security of supply to retail and commercial customers in Malaysia assured, says Shell. — Reuters file pic

KUALA LUMPUR, Feb 1 — Shell has reached a conditional agreement with Malaysian Hengyuan International Limited (HIL) for the sale of its 51 per cent shareholding in Shell Refining Company (SRC) in Malaysia for US$66.3 million (RM274.5 million).

The transaction was expected to be completed in 2016, subject to obtaining regulatory approval, Shell said in a statement issued in London today.

Shell said it was HIL’s intention for SRC to invest in the upgrades needed to meet the Euro 4M and Euro 5 requirements.

Shell Malaysia Trading will ensure security of supply to its retail and commercial customers in Malaysia and honour other existing commitments through an existing comprehensive supply strategy that includes a long-term offtake from SRC.

Shell said the sale was consistent with its strategy to concentrate its global downstream footprint and businesses where it could be most competitive.

Malaysia continued to be an important country for Shell and as the leading retail fuels and lubricants provider, it would continue to invest in growing these businesses in the country, said Shell.

It added other recent downstream divestments included the sale of downstream businesses in Australia and Italy and a number of retail sites in Britain.

Shell has also agreed to the sale of its marketing business in Denmark and Norway, its liquefied petroleum gas (LPG) businesses in France and a 33.24 per cent shareholding in Showa Shell Sekiyu K.K. — Bernama