SINGAPORE: Shell is currently in discussions with Saudi Aramco regarding the potential sale of its gas station business in Malaysia, which stands as the country’s second-largest network. The talks, according to four industry sources familiar with the matter, could result in a deal valued at up to $1 billion.
Although Shell and Saudi Aramco have declined to comment on the negotiations, it’s noteworthy that Malaysia holds significant importance for Shell. The London-based energy giant wholly owns approximately 950 fuel stations across Malaysia, trailing only behind the state-owned Petronas in terms of network size.
These discussions, initiated in late 2023, are progressing, with the possibility of finalizing a deal in the near future, as suggested by one insider. Estimated to be between 4 billion to 5 billion ringgit ($844 million to $1.06 billion) in value, the potential deal aligns with Shell’s strategic decision to concentrate on its most profitable ventures under CEO Wael Sawan’s leadership.
Beyond fuel stations, Shell is engaged in various operations in Malaysia, including the sale of industrial lubricants and offshore production of crude oil and natural gas. Additionally, it has stakes in two liquefied natural gas (LNG) ventures.
This proposed sale is part of Shell’s broader divestment strategy, aiming to shed 500 gas stations this year and next, alongside the ongoing process of selling its Singapore refinery and petrochemical complex. Notably, the move to sell its Malaysia fuel stations mirrors its decision to divest its Bukom Island refinery in Singapore, which supplies the Malaysian network.
While Saudi Aramco doesn’t currently operate fuel stations in Malaysia, it holds a 50% stake in the Pengerang refinery in Johor, a joint venture with Petronas. Aramco’s operations extend to petrol stations in Saudi Arabia and other regions, including joint ventures with major players like TotalEnergies and South Korea’s S-Oil Corp.–REUTERS
