Dansk Olieselskab deal 'will not complete', says Shell

Oil major decides to retain ownership in Dansk Shell, but insists $30bn divestment programme is 'on track'.



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Updated on 02 Jan 2018 13:07 GMT

Shell has announced that the agreement it signed with Dansk Olieselskab AS in 2016 for the sale of A/S Dansk Shell "has terminated and the sale will not complete".

"A/S Dansk Shell, including the refinery and local trading and supply activities, will remain under Shell's ownership and continue business as usual," Shell said in a statement on Tuesday.

As Bunker Index previously reported, Shell reached an agreement with Dansk Olieselskab in September 2016 in a deal consisting of the 70,000-barrel-per-day, bunker-producing Fredericia refinery and local trading and supply activities for approximately $80 million, including working capital.

The transaction included long-term agreements for the supply of crude oil and feedstocks to the refinery and for the offtake of some products from the plant.

The Fredericia refinery produces a range of products, including fuel oil, jet fuel, diesel, kerosene, furnace oil, liquefied petroleum gas and gasoline. It is a key location for the sourcing of product for the marine fuels market - in addition to the country's other 110,000-barrel-per-day refinery in Kalundborg, which is operated by Statoil.

Back in May 2016 (it was confirmed in March 2015), Shell sold its marketing business in Denmark to Alimentation Couche-Tard Inc, comprising retail, commercial fleet, commercial fuels, aviation and connected trading and supply products businesses.

Couche-Tard operates the marketing business under the Shell brand through a trademark licence agreement, under which the Shell brand is contracted to remain "highly visible" in Denmark through the Shell-branded retail network and in the fuels wholesaling sector.

Shell said on Tuesday that its $30 billion divestment programme remains on track to complete in 2018, with deals worth $23 billion completed, $2 billion announced and $5 billion in advanced progress.