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Shell eyes sale of Australia downstream business

01.08.2014  | 

Geneva-based Vitol is studying assets including storage terminals, filling stations and an oil refinery in Geelong, south of Melbourne, said the people, asking not to be identified as the details are private. Buyout firm TPG Capital and a group led by Macquarie Group are also weighing bids.

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By ANDY HOFFMAN and BRETT FOLEY
Bloomberg

Vitol Group, the world’s largest independent oil trader, is considering a bid for some of Royal Dutch Shell's Australian downstream operations, according to two people with knowledge of the matter.

Geneva-based Vitol is studying assets including storage terminals, filling stations and an oil refinery in Geelong, south of Melbourne, said the people, asking not to be identified as the details are private. Buyout firm TPG Capital and a group led by Macquarie Group are also weighing bids for some of the assets, two people familiar with the situation said.

Shell, Europe’s biggest oil company, is stepping up asset sales after spending a record $45 billion on projects and acquisitions last year. Its earnings from refining and marketing dropped by almost half to $892 million in the three months to September.

The Hague-based company’s Australian unit said in April it would sell the Geelong refinery to focus on larger plants, such as the Pulau Bukom refinery in Singapore. The Geelong facility, which processes about 120,000 bpd of oil, may be converted to a fuel import terminal if a sale isn’t completed, according to its website.

Shell also has a network of about 900 filling stations in Australia, two-thirds of which are operated by its retail partner Coles Group Ltd., owned by Wesfarmers Ltd.

Spokesmen for Shell, Vitol, Macquarie and TPG declined to comment. Shell plans to sell about A$3 billion ($2.7 billion) of Australian assets and is talking to parties including TPG and a group that includes Macquarie, the Australian Financial Review reported today, citing unidentified people.

African Purchase

Shell is being advised by Bank of America Corp. on the sale, the people said.

Vitol agreed in 2011 to buy the bulk of Shell’s downstream business in 14 African countries, alongside Africa-focused private equity firm Helios Investment Partners, for about $1 billion. The Swiss company owns and operates refineries in the United Arab Emirates, Switzerland and the Netherlands with a refining capacity of about 150,000 bpd, according to its website. It also has a storage terminal venture with facilities in 14 countries.

Australia’s Macquarie Capital agreed in August to buy 45% of Singapore’s Helios Terminal Corp. from Oiltanking for an undisclosed sum, the closely-held German company said Aug. 12. 

Oiltanking bought the terminal on Jurong Island, which comprises 18 storage tanks, from Chemoil Energy for $285 million a year ago.



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