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Shell confirms sale of refinery to Vitol

Article By: ,  Financial Analyst
February 21, 2014 9:15 AM

The share price of Royal Dutch Shell has risen this morning (February 21st) following the news the company has agreed the sale of its Australian downstream business.

A refinery in the country is also included in the $2.6 billion (£1.6 billion) sale to Vitol, which is a major trading firm in the oil sector.

Shell's aviation business is not included in the deal and Ben van Beurden, chief executive of Shell, said Australia is still an important market for the company.

He said: "But we are making tough portfolio choices to improve the company's overall competitiveness.

"Our customers will continue to benefit from the quality associated with the Shell brand and we are confident Vitol will invest in and grow the business."

Vitol reaction

President and chief executive of Vitol Ian Taylor described the acquisition of Royal Dutch Shell's Australian downstream business as an "exciting" one for the company.

He added that the deal has been done for "a good company led by an experienced management team and underpinned by the value of the Shell brand". Mr Taylor said: "Australia is a growing economy and we look forward to working with the management team to strengthen and grow the business."

The impact Shell has had on Australia has also been acknowledged by Shell's Australia country chair, Andrew Smith, who hailed the role of the Geelong refinery in the firm's operations in the nation in recent years.

He said: "Shell will continue to play a major role in the development of Australia's expanding liquefied natural gas industry, and we look forward to strengthening our presence in the years ahead."

The deal is expected to be completed later in the year and is likely to be given the green light by the regulatory authorities.

By 08:19 GMT this morning, shares in Royal Dutch Shell were up by around 0.5 per cent on the back of the announcement of the deal with Vitol.

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