THE WALL STREET JOURNAL: Shell : No Comment On Rumored New Latin America Sales
“In Argentina, reports say that Shell ‘s 900 service stations and its refinery plants are the potential target of a joint bid”
DOW JONES NEWSWIRES
Posted 19 August 04
The sale of the Peruvian unit is part of Shell’s broader divestment plan, aimed at axing the company’s less profitable units. The company has also sold subsidiaries in Venezuela and Portugal recently.
In Argentina, reports say that Shell ‘s 900 service stations and its refinery plants are the potential target of a joint bid by Petroleos de Venezuela SA, or PdVSA (PVZ.YY), and Argentina’s new state-run company ENARSA. PdVSA has long spoken about acquiring service stations in Argentina.
On Tuesday, when asked whether PdVSA would consider a joint bid with ENARSA for Shell ‘s Argentine units, a news report cited Venezuela’s Energy and Mining Minister Rafael Ramirez saying “it is one of the possibilities.”
On Wednesday morning, Argentine business daily El Cronista cited market sources saying that Shell was looking to make a joint sale of its assets in Argentina, Chile and Brazil. The newspaper said Shell hoped to collect around $1 billion for its Argentine units, which include a Buenos Aires refinery capable of processing 100,000 barrels daily.
Chilean media also recently reported that Shell was looking to sell its assets there.
Officials at Shell ‘s Argentine unit have been vocal in their concerns about the local refinery business. Late last year, the president of the local unit, Juan Jose Aranguren, warned that refinery margins had fallen so low that the business was barely viable.
The company has been hit on several fronts in Argentina. Strong government pressure to stop fuel price increases and high local fuel taxes have impacted the company’s earnings.
Crucially, fuel sale volumes have fallen steadily in recent five years because of the rapid growth of vehicles converted to compressed natural gas. Some 1.3 million cars – around 20% of Argentina’s vehicle fleet – use CNG, the largest number in the world.
-By Laurence Norman, Dow Jones Newswires; 5411-4311-3127;
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