Shell said to be in talks to sell its entire Malaysian petrol station network to Saudi Aramco – report

Here’s some big news. Shell is reportedly in talks with Saudi Arabia’s state-owned Saudi Aramco to sell its petrol station business in Malaysia, Reuters reports. The news agency cited four industry personnel familiar with the matter as its sources.

According to one of the sources, talks are said to have begun in late 2023, and a deal may be finalised in the coming months. Two other sources who were briefed on the matter placed the deal down at roughly four to five billion ringgit.

With around 950 stations across Malaysia, Shell has the second-largest fuel retail network in the country after Petronas, which operates a larger network. The report indicated that Shell declined to comment on the talks, but said Malaysia is an important country to the company. Meanwhile, Saudi Aramco also declined to comment on the matter.

In addition to its fuel station network, Shell also sells industrial lubricants, produces crude oil and natural gas offshore of Sarawak and Sabah, and is a joint venture partner in two liquefied natural gas (LNG) projects.

The report says that the sale is part of Shell CEO Wael Sawan’s efforts to focus the company’s operations on the most profitable businesses, of which it would now seem that fuel retail is not one of them.

It is not known if the Shell Recharge DC and AC electric vehicle charging network and ParkEasy, of which Shell Malaysia has a 50% stake in, are part of the potential acquisition deal – there should be some movement on this front, given that it would be rather strange to retain Shell branding at Aramco stations for this purpose.

According to the news report, the company had indicated that it would look to divest 500 stations this year and next, and is in the process of selling its Singapore refinery and petrochemical complex. One of the sources told Reuters that the company’s effort to sell its Malaysia fuel station network is consistent with its move to sell its refinery on Bukom Island in Singapore, which supplies the network.

As for Saudi Aramco, it of course does not have a retail presence in Malaysia, but owns 50% of the 300,000-barrel per day Pengerang refinery in Johor in a JV with Petronas. While Aramco operates petrol stations in Saudi Arabia, it only began doing so in 2019. It also operates fuel stations elsewhere in JVs with French player TotalEnergies and South Korea’s S-Oil Corp.

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