Shell in talks to sell Malaysia fuel stations to Saudi Aramco, sources say

S-Oil

07/05/2024 13:45

(Adds updated statement from Shell in second paragraph of May 6
story)
    By Trixie Yap, Yantoultra Ngui and Ron Bousso
       SINGAPORE, May 6 (Reuters) - Energy giant Shell is in
talks with Saudi Arabia's state-owned Saudi Aramco to sell its
gas station business in Malaysia, the second-largest such
network in the country, four industry sources aware of the
discussions said, and a deal could be worth up to $1 billion.
    Shell said Malaysia is important to the company. "We remain
committed to the mobility business in the country," it said in
an updated statement on Tuesday, without elaborating.
    Saudi Aramco declined to comment on Monday.
    London-based Shell  SHEL.L  wholly owns around 950 fuel
stations across the Southeast Asian country, according to its
website, with only Malaysia's state-owned Petronas operating a
bigger network.
    Talks began in late 2023 and a deal may be finalised in the
coming months, one source said. Two sources briefed on the
matter put a potential deal size at roughly 4 billion to 5
billion ringgit ($844 million to $1.06 billion).
    In addition to its fuel stations, Shell sells industrial
lubricants, produces crude oil and natural gas offshore of
Sarawak and Sabah states, and is a joint venture partner in two
liquefied natural gas (LNG) ventures. 
    The sale is part of CEO Wael Sawan's efforts to focus the
company's operations on the most profitable businesses. Shell
has said it would look to divest 500 gas stations this year and
next. It is in the process of selling its Singapore refinery and
petrochemical complex.
    Shell's effort to sell its Malaysia fuel stations is
consistent with its move to sell its refinery on Bukom Island in
Singapore, which supplies the network, one of the sources said.
    Saudi Aramco does not have fuel stations in Malaysia,
although it owns 50% of the 300,000-barrel per day (bpd)
Pengerang refinery in Johor in a joint venture with Petronas,
which sells fuel domestically and for export.
    Aramco operates petrol stations in Saudi Arabia and also
operates fuel stations elsewhere in joint ventures with French
major TotalEnergies  TTEF.PA  and South Korea's S-Oil Corp
 010950.KS .

($1 = 4.7390 ringgit)

 (Reporting by Trixie Yap, Yantoultra Ngui and Florence Tan in
Singapore and Ron Bousso in London; Editing by Tony Munroe,
Jacqueline Wong and Louise Heavens)
 ((Trixie.yap@thomsonreuters.com))