Shell says may sell French refineries
Thu Jan 11, 2007 1:30pm ET
LONDON/AMSTERDAM, Jan 11 (Reuters) - Royal Dutch Shell Plc. may sell its three French refineries and other refining and petrochemicals assets after receiving bid approaches, the Anglo-Dutch oil giant said on Thursday.
Rob Routs, Shell's Downstream boss said in a statement that the Amsterdam-based company wanted to "streamline and concentrate" its downstream business.
Rivals including BP Plc have, over the past two years, also taken advantage of a resurgence in the refining and petrochemical industries to sell facilities and whittle down their exposure to these often-troubled businesses.
"This review will include, amongst other assets, Petit-Couronne and Reichstett-Vendenheim refineries and the Berre-l'Etang refinery site complex in France, with a combined capacity of around 300,000 barrels per day," the company said in a statement.
The review of Shell's downstream portfolio will also include the Yabucoa petrochemical feedstock plant in Puerto Rico, which has a capacity of 79,000 barrels per day of fuels and ethylene feedstock, Shell said.
"A number of parties have approached us with an interest in purchasing them (the assets) as going concerns," Routs said.
Industry sources previously said the oil major was mulling a sale of its French refineries.
Swiss-based Petroplus, Russia's LUKOIL and Brazil's Petrobras are seen as among potential buyers after indicating they wished to buy refining assets in western Europe.
Kuwait Petroleum International is also considered a possible bidder after the state-controlled company pulled the planned sale of its Rotterdam refinery last year, saying it had changed strategy and now wanted to acquire downstream assets instead.
However, a perception of a difficult labour environment, after a number of strikes at French refining and petrochemical facilities owned by Paris-based oil major Total SA over the past two years, may deter some bidders, bankers said.
Shell will also face a crowded market of refinery sellers.
BP has put its Coryton refinery in the UK on the market, after selling its Grangemouth and Lavera refineries in 2005.
Italy's Tamoil is also up for sale while Chevron is trying to sell its 31 percent stake in the 400,000 barrel per day Nerefco refinery in the Netherlands.
The oil industry is divided between those like Exxon Mobil and BP who think a two-year run of strong refining margins, after almost two decades of tough times, will end soon, and those, such as independent refiners like Petroplus, who are more optimistic.
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