Royal Dutch Shell PLC’s Australian arm, based in Melbourne, has made an arrangement with Viva Energy Australia Pty. Ltd. to sell its local aviation fuels division for $250 million.
The deal comes 2 years after Shell sold its other Australian refining and fuels businesses to Viva for $2.9 billion in 2014. It has also heightened speculation that the major is planning to sell out of its remaining 13.3% stake in Perth-based upstream company Woodside Petroleum Ltd.
The aviation sale is slated to close by mid-2017. The arrangement is similar to the earlier downstream deal in that Viva will still use the Shell brand for the aviation refuelling business under a licencing agreement.
Viva is owned by European commodity trader Vitol and Abu Dhabi interests. The company sees the aviation deal as highly complementary to its existing downstream activities.
The arrangement will enable Viva to expand into major Australian airports as well as build supply to the smaller regional airfields and provide fuel direct to customers.
The Shell sellout of its Woodside interest is now widely tipped to occur early in 2017 given that Shell has already said its stake has been reclassified as nonstrategic. Analysts expect the interest will be divested as a block sale to investors.
Shell says that its direct interest in offshore Western Australian operations—the North West Shelf domestic gas-LNG project, Gorgon domestic gas-LNG and Prelude Floating LNG—will remain in place.
