Shell scraps sale of Danish refining unit
Royal Dutch Shell PLC has terminated the proposed $80-million sale of its Danish subsidiary AS Dansk Shell to Dansk Olieselskab APS.
The deal, under which Dansk Olieselskab was to acquire the 70,000-b/d Fredericia refinery as well as Dansk Shell’s local trading and supply activities—including its long-term agreements to buy refinery feedstocks and sell finished products—will not be completed, Shell said on Jan. 2.
Dansk Shell, including the refinery and local trading and supply activities, will remain under Shell’s ownership and continue business as usual, according to the company.
Despite best attempts by Shell and Dansk Olieselskab to make the deal work, the parties could not meet terms and conditions of the sale agreement, Shell said.
Shell has no current plans to remarket Dansk Shell, said Bart Voet, vice-president of Shell’s industrial production in Europe, Africa, and Asia Pacific.
The failed deal, which would have ended Shell’s downstream presence in Denmark, originally came as part of the operator’s strategy to concentrate its downstream operations on areas where it can be most competitive.
Despite the cancelled sale of Danish assets, Shell said its broader $30-billion divestment program remains on track to be finished in 2018, with deals worth $23 billion already completed, as well as $2 billion in announced deals and a further $5 billion in other deals now in advanced stages of negotiation.
Shell previously sold Dansk Shell’s retail, commercial fuels, and aviation businesses in Denmark to Canadian-based convenience store firm Alimentation Couche-Tard Inc., Laval, Que., in a deal that closed in May 2016.
Shell’s other recent downstream divestments include the sale of its downstream businesses in Australia and Italy, a number of UK retail sites, and the initial public offering of and further drop-downs to Shell Midstream Partners LP (OGJ Online, Feb. 21, 2014).
In addition to shedding its marketing businesses in Denmark and Norway, its LPG businesses in France, and its 33.24% shareholding in Showa Shell Sekiyu KK, the company also completed the sale of its majority interest in Shell Refining Co. (FOM) Bhd., including the 125,000-b/d refinery in Port Dickson, Malaysia, to a subsidiary of China’s Shandong Hengyuan Petrochemical Co. Ltd., Shandong (OGJ Online, Dec. 22, 2016).