Wednesday, Jul 21, 2010
(Updates with Shell comment and detail)
LONDON (Dow Jones)--Private oil trading company Vitol SA is in negotiations to buy equity in Shell Oil Products, part of Royal Dutch Shell PLC (RDSB), businesses in 19 African countries, the company said Wednesday.
"Under the terms of the proposed deal, which would see the Shell brand and products remain in each country, Vitol and Helios would become the majority shareholders in the businesses, with Shell retaining a shareholding," said Shell spokesman David Williams.
Vitol is in talks for downstream businesses that include retail, commercial fuels, lubricants, liquefied petroleum gas, bitumen, aviation and marine fuel in Morocco, Tunisia, Egypt (excluding lubricants), Ivory Coast, Burkina Faso, Ghana, Togo, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Tanzania, Botswana (excluding LPG), Namibia, Madagascar, Mauritius and Reunion.
The deal would involve 1300 retail sites, and 1,200,000 cubic metres of terminal storage in total.
Any potential deal for Vitol will be done in partnership with private equity investment firm Helios Investment Partners.
Shell's fuels, lubricants and refining activities in South Africa, its lubricants business in Egypt, its LPG businesses in South Africa and Botswana, and its exploration and production businesses, liquefied natural gas interests and most international trading activities in Africa aren't in scope of the proposed deal, Williams added.
The Vitol group has grown rapidly to become major participant in the energy markets, trading more than 5.5 million barrels of crude oil and oil products a day. It has more recently expanded its activities in to other areas of energy to include LNG natural gas, coal power and carbon emissions trading teams.
Although Vitol has been trading in Africa for more than 40 years any deal with Shell to move in to the retail sector marks a new direction for the company.
-By Angela Henshall, Dow Jones Newswires; +44 (0)20 7842 9285; angela.henshall@dowjones.com
(END) Dow Jones Newswires
21-07-10 1550GMT
