Royal Dutch Shell Plc, which is currently the largest oil company in Europe, revealed that it reached an agreement with Vitol Group over the acquisition of its Australian refinery and filing stations in a deal estimated to 2.9 billion Australian dollars (2.6 billion dollars).
Royal Dutch Shell Plc made an official statement today, announcing that the acquisition includes the Geelong oil refinery, which is situated south of Melbourne, as well as its 870-site retail business. The company also explained that the aviation fuel business is not included in the deal.
Vitol Group is currently considered as the largest independent oil trader. The company announced today that it plans to keep Shells Australian refinery working and even broaden the business in Australia due to the countrys economy growth.
Ian Taylor, Chief Executive Officer of Vitol Group, said in a news conference today: “We accept that the global environment is challenging. We can make this refinery profitable.”
According to its official statement, Vitol will keep on selling gasoline under the Shell brand in Australia as part of the agreement. Bitumen, chemicals and lubricant assets are also included in the latter.
Ben van Beurden, Shells Chief Executive Officer, is becoming more focused on boosting the companys asset sales, considering the fact that narrow refining margins and unprofitable shale investments in North America decreased the companys earnings. Royal Dutch Shell Plc also said that it has recently reached an agreement to sell refineries located in the U.K., Norway, France, Germany and the Czech Republic. The company also revealed that more operations located in Norway and Italy are planned to be sold.
One of the energy analysts working for Credit Suisse Group AG – Mark Samter, said in a telephone interview, which was cited by Bloomberg: “Vitol believes they can source product more efficiently than the rest of the Australian market as highly competent traders.” Mr. Samter also said that it “remains to be seen” if Vitol will be able to make the refinery profitable.
In its statement, Royal Dutch Shell Plc emphasized on the fact that the companys investments in the so-called upstream energy investments will not be influenced by the deal. The Chief Executive Officer Mr. Ben van Beurden said, cited by Bloomberg: “Australia remains important to Shell, but we are making tough portfolio choices to improve the company’s overall competitiveness.”
Royal Dutch Shell Plc rose by 0.41% in London by 9:02 GMT to GBX 2 205, marking a one-year change of +3.16%.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
