Royal Dutch Shell PLC announced today that it has agreed a US$950-million deal to sell its downstream business in Argentina to the Raízen Group of São Paulo.
"Shell has signed an agreement to sell its downstream business in Argentina to Raízen for US$950 million," the company said in a statement. The operation remains "subject to normal conditions of closure," it added.
Alongside its refinery in Buenos Aires, the deal includes 645 retail outlets or petrol stations, its supply and distribution activities of fuels, chemicals and lubricants in the country and other businesses.
The operation is part of Shell's plan to divest assets worth US$30 billion to respond to a fall in the price of oil. The decision comes following a strategic review of the company’s business in Argentina that began in August 2016. The acquisition will be completed before the end of the year, Shell said and will see Raízen continue its relationship with Shell through commercial agreements worth about $300 million.
Shell will keep its upstream business (exploration and production activities) in the Vaca Muerta field in the southwest, the company said, seeing potential in Argentina’s shale resources.
"Our plan is to continue to thrive in the Argentine downstream market through Raízen," Shell downstream's global director, John Abbott, said in comments reported by Ámbito Financiero. "Raízen has generated great value for us in Brazil and, under this agreement, we will continue to be an important fuel supplier for Argentina."
Raízen is a Brazilian producer of biofuels and a fuel distributor with more than 6,000 service stations in Brazil, for which it uses the Shell brand. The company was created in 2011 as a equal joint venture by Shell and Cosan, based in São Paulo.