Mon 21 Feb 2011 18:31

Shell sells Africa downstream assets


Vitol partnership to buy a majority stake in most of Shell's downstream businesses in Africa.



Vitol has announced that, in partnership with Helios Investment Partners, it has agreed to purchase the majority of Shell's shareholding in most of its downstream businesses in Africa for a total consideration of approximately US$1 billion.

Under the agreements, two new joint venture companies will provide continued availability of Shell fuels and lubricants in 14 African countries under the Shell brand.

"We are delighted to have concluded this agreement with Shell and Helios," said Ian Taylor, President and CEO of the Vitol Group. "Africa is a continent we know well. These two new ventures allow us to invest in Africa and its fast-growing economies, and grow all the businesses under the umbrella of the world-class Shell brand for the benefit of our customers."

"We are pleased to enter into this landmark agreement with our partners, Shell and Vitol,” said Tope Lawani, Managing Partner of Helios Investment Partners. "We believe that combining Vitol's world class supply expertise and Helios' deep understanding of the African operating environment with the Shell brand and a highly professional workforce will create significant new growth opportunities for the business, and will ensure the continued supply of high quality products and services for African consumers."

"This is a good deal for our customers as well as for Shell," said Mark Williams, Royal Dutch Shell’s Downstream Director. "We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint, and continue to provide the high quality Shell products that our African customers have come to trust and rely on over many decades."

One joint venture will own and operate Shell’s existing oil products, distribution and retailing businesses in 14 African countries, with the potential to add five more in future. Vitol and Helios will hold 80% of the venture and Shell will hold the remaining 20%. A separate company, which will be 50% owned by Shell and 50% by Vitol and Helios, will own and operate Shell’s existing lubricants blending plants in seven countries and will manage macro-distributor relationships in each of the countries where the main venture operates, plus a number of others.

"Vitol, Helios and Shell will now concentrate on securing necessary regulatory approvals and integration planning, ahead of a phased completion of the proposed deal during 2011 and the first half of 2012," Vitol said in a statement.

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