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Brunei Times: Shell shifts refining focus to Asia

LONDON
03-Feb-07

ROYAL Dutch Shell Plc is shifting the focus of its refining operations toward Asia and toward larger facilities, moves which may lead the oil major to sell more refineries, top executives said. “In the downstream business, we move from west to east in the world,” Chief Executive Jeroen van der Veer told a news conference.

“Why? Quite simple, because the growth is there.”

Refining boss Rob Routs said that in addition to recently announced divestment plans, Shell may sell more facilities. “We have a substantial amount of assets that we actually want to get out of,” Routs said.

“If you look across the portfolio … we still have a lot of smaller refineries in there. We like large and complex facilities, bigger scale and that’s the rationalisation process we’re in right now,” Routs said.

Shell has announced an agreement to sell its Wilmington refinery near Los Angles to Tesoro Corp and last month said it was putting its three French refineries and one in the Dominican Republic up for sale.

However, van der Veer said he expected Shell’s capital employed in the refining business to remain constant, due to investments in Asian countries including China and Singapore. He also expected a two-year revival in the refining business to come to an end and margins to fall in coming years.

Chief Financial Officer Peter Voser said Shell will target investments in areas believed resilient to any such fall, such as parts of the US and Asia.

Excluding Wilmington, Shell has two medium-sized refineries in the United States one in California and another in Washington. The Anglo-Dutch company also has interests in larger US facilities, some of which are being expanded.

Reuters

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