Vitol Group mulls bid for Royal Dutch Shell's Australian downstream assets-sources

By Nicel Jane Avellana

Jan 08, 2014 05:33 AM EST

Two sources told Bloomberg that Vitol Group is thinking of making an offer for some of the Australian downstream operations of Royal Dutch Shell Plc. Based in Geneva, Vitol is the biggest independent oil trader in the world.

The people, who spoke on the condition of anonymity because the details are confidential, said that Vitol is evaluating assets like storage terminals, filling stations and an oil refinery located in Geelong. Two other sources have also told Bloomberg that buyout company TPG Capital and another group headed by Macquarie Group Ltd are thinking of bidding for the assets.

Shell is ramping up efforts to sell assets after spending as much as $45 billion on projects and acquisitions in 2013, the report said. Europe's largest oil firm said on October 31 that its refining and marketing earnings fell by nearly half to $892 million in the three months ending September.

In April, Shell's Australian unit said it would divest the refinery in Geelong so it could concentrate on bigger plants like the Pulau Bukom refinery located in Singapore. The company's website revealed that the Geelong plant could be transformed to a fuel import terminal if it could not be sold. The facility processes around 120,000 barrels of oil each day.

In Australia, Shell also has around 900 filling stations, with two-thirds operated by Coles Group Ltd, its retail partner. Wesfarmers Ltd owns Coles Group Ltd.

Citing unnamed sources, a report in the Australian Financial Review said Shell intends to divest Australian assets amounting to around A$3 billion or $2.7 billion and that it is already discussing with some firms, including TPG and the Macquarie group.

The sources said Bank of America Corp is Shell's adviser for the sale.

In 2011, Vitrol said it would be purchasing most of the downstream business of Shell in 14 African countries together with Helios Investment Partners, an Africa-focused private equity company, the report said 

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