Shell confirms sale of refinery to Vitol

<p>The Australian downstream business has been sold for £1.6 billion.</p>

The share price of Royal Dutch Shell has risen this morning (February 21st) following the news the company has agreed the sale of its Australian downstream business.

A refinery in the country is also included in the $2.6 billion (£1.6 billion) sale to Vitol, which is a major trading firm in the oil sector.

Shell's aviation business is not included in the deal and Ben van Beurden, chief executive of Shell, said Australia is still an important market for the company.

He said: "But we are making tough portfolio choices to improve the company's overall competitiveness.

"Our customers will continue to benefit from the quality associated with the Shell brand and we are confident Vitol will invest in and grow the business."

Vitol reaction

President and chief executive of Vitol Ian Taylor described the acquisition of Royal Dutch Shell's Australian downstream business as an "exciting" one for the company.

He added that the deal has been done for "a good company led by an experienced management team and underpinned by the value of the Shell brand". Mr Taylor said: "Australia is a growing economy and we look forward to working with the management team to strengthen and grow the business."

The impact Shell has had on Australia has also been acknowledged by Shell's Australia country chair, Andrew Smith, who hailed the role of the Geelong refinery in the firm's operations in the nation in recent years.

He said: "Shell will continue to play a major role in the development of Australia's expanding liquefied natural gas industry, and we look forward to strengthening our presence in the years ahead."

The deal is expected to be completed later in the year and is likely to be given the green light by the regulatory authorities.

By 08:19 GMT this morning, shares in Royal Dutch Shell were up by around 0.5 per cent on the back of the announcement of the deal with Vitol.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.