Royal Dutch Shell (Shell), the Anglo-Dutch oil and gas major, has agreed to sell 51 percent of its Malaysian refinery subsidiary to Chinese-owned Malaysia Hengyuan International (MHI) for $66.3 million.
The deal comes in the wake of a number of divestments by the group, which is retreating from non-core businesses as plummeting oil prices take their toll on profits.
Shell recently sold its downstream businesses in Australia and Italy, exited a number of retail sites in the UK, and listed Shell Midstream Partners on the New York Stock Exchange.
The company is also in the process of offloading its marketing businesses in Denmark and Norway, its liquefied petroleum gas businesses in France and a 33.24 percent stake in Showa Shell Sekiyu KK.
“The sale is consistent with Shell’s strategy to concentrate its global downstream footprint and businesses where it can be most competitive,” Shell said in a statement. The company also said that it will continue to invest in retail fuels and lubricants businesses in the country.
Shell Malaysia Trading said it will “ensure security of supply of 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 Shell Refinery Company.”
The deal, subject to regulatory approval, is expected to complete within this year.
Shell is currently concluding its proposed merger with Reading-based gas company BG Group.
Shareholders from both sides have voted in favour of the merger proposal, which will see BG shareholders receive £3.83 (€5.05; $5.52) in cash and 0.4454 Shell’s B Shares for each BG share.
Shell expects the merger to boost its presence in the global liquefied natural gas and deepwater sectors. The transaction is meant to be a “springboard” for faster portfolio change, particularly in exploration and other long-term plays, according to Ben van Beurden, chief executive officer of Shell.
The £47 billion transaction is expected to complete on 15 February.