JOHANNESBURG (Reuters) - Anglo-Dutch oil giant Shell (RDSa.L) has agreed to divest the majority of its stake in most of its downstream businesses in Africa to two firms for $1 billion, the company said on Saturday.
Under the agreements with Vitol and Helios Investment, Shell would retain equity in two new joint venture companies to ensure continued availability of its products, it said.
“This is a good deal for our customers as well as for Shell,” said Mark Williams, Royal Dutch Shell’s Downstream Director said in a statement.
“We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint.”
Shell said one joint venture — 80 percent owned by independent trader Vitol and Helios and 20 percent by Shell — will own and operate its existing oil products, distribution and retailing businesses in 14 African countries, with the potential to add five more.
Another company, 50 percent owned by Shell and 50 percent by Vitol and Helios, will own Shell’s existing lubricants blending plants in seven countries and manage macro-distributor relationships in each of the countries where the main venture operates.
The three firms would work on securing necessary regulatory approvals, ahead of a phased completion of the proposed deal this year and the first half of 2012, Shell said.
Reporting by Olivia Kumwenda