Royal Dutch Shell Plc  .com Rotating Header Image

TheBusiness: Shell drums up interest for French oil operations

Shell

By Richard Orange
15/11/2006

Royal Dutch Shell is considering selling its French oil business. The Anglo-Dutch giant is reviewing these operations, which could lead to it disposing of one or all of its three refineries in France, potentially raising up to $4bn (€3.1bn, £2.1bn)

The Business understands the company has contacted potential bidders for its Reichstett and Petit Couronne plants in France to determine interest. It has hired an investment bank, believed to be JP Morgan or Citigroup, to aid it with the review.

Russia’s Lukoil and American private equity company Carlyle Group have been snapping up refineries this year and will be interested in any disposals. Carlyle recently bought ExxonMobil’s German Ingolstadt site and Lukoil agreed to pay $1bn for a refinery in Rotterdam, only for the seller, Kuwait Petroleum, to pull the sale.

Other major oil companies, including BP, Total, ExxonMobil and Shell, are considering the future of their European refineries. But first they want to judge whether the appetite from private equity and trade buyers will match price expectations. BP is selling its only remaining refinery in Britain at Coryton in Essex; Chevron is selling its stake in the BP-operated Nerefco refinery; while Exxon has sold one refinery and is looking at selling a package of petrol stations in Eastern Europe.

The reason for the sales is that although refining has been profitable recently, it is a highly cyclical, low-return business. Oil companies are questioning the logic of combining upstream and downstream operations when they could get high prices for them.

On Tuesday, Israel’s Delek Petroleum said it was in exclusive talks with Chevron to buy 750 of its petrol stations in Belgium, the Netherlands and Luxembourg . The move may also open the way for a renewed attempt by Shell to sell its $2bn liquefied petroleum gas business – much of which is based around the company’s French refining network.

Shell spent a year trying to sell the business but had to pull the sale at the start of this year because it could not get the price it wanted.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “TheBusiness: Shell drums up interest for French oil operations”

Leave a Comment

%d bloggers like this: