Shell might not be the owner of its fuel stations in Malaysia anymore. You heard that right, as the London-based energy company is currently in talks with Saudi Arabia’s state-owned Saudi Aramco to sell its Malaysian fuel stations, according to a report by Reuters.
According to industry sources, the deal, if succeeds, can be worth up to USD1 billion (approx. RM4.7 billion). Thus far, Shell has declined to comment on the talks but mentioned that Malaysia is an important country for the firm. Saudi Aramco has also declined to comment on the matter.
Shell, which is based in London, UK, currently has approximately 950 fuel stations in Malaysia, according to its website. This makes it the second-largest fuel station network in the country, just behind Petronas.
According to one of the four sources which are aware of the deal, talks between the two energy companies have begun as early as late 2023. A decision can be expected to be made in the next few months. Other sources have claimed that the deal can be worth between RM4 billion and RM5 billion.
Aside from fuel retail, Shell is also invested in other businesses, such as industrial lubricants sales, crude oil production, and natural gas. The London-based company is involved in the liquefied natural gas (LNG) business as a joint venture partner in two of such projects as well.
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According to the report, Shell’s plan to sell its Malaysian fuel station business is part of the company’s CEO Wael Sawan’s efforts to focus on its most profitable businesses, which fuel retail isn’t part of. Shell mentioned that it would look to divest 500 of its fuel stations between this year and next. According to one of the sources, Shell’s plan to let go of the business is also in line with its move to sell its refinery on Bukom Island In Singapore, which is the supplier for the network.
Saudi Aramco does not own any fuel stations in Malaysia. It does, however, own 50% of the 300,000-barrel per day (bpd) Pengerang refinery in Johor, which sells fuel domestically and for export, in the form of a joint venture with Petronas.
The Saudi Arabia state-owned energy company also owns petrol stations throughout multiple countries, including in its home country. It also owns petrol stations elsewhere in joint ventures with French-based TotalEnergies and South Korea-based S-Oil Corp.
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