So is Saudi facing an oil shortage or is Malaysia selling petrol stations and land?
Energy giant Shell is apparently in talks with Saudi Arabia’s state-owned Saudi Aramco to sell its gas station business in Malaysia, the second-largest such network in the country, four industry sources aware of the discussions said, and a deal could be worth up to USD1 billion (roughly RM4.7 billion).
Shell declined to comment on the talks but said Malaysia is an important country to the company. Saudi Aramco also declined to comment. So what is happening here then? Is Malaysia only selling the land and the stations or did the impossible happen and Saudi is running out of oil? The former is more likely but that is still not good for Malaysia.
Moreover, London-based Shell wholly owns around 950 fuel stations across the Southeast Asian country, according to its website, with only Malaysia’s state-owned Petronas operating a bigger network. Talks began in late 2023 and a deal may be finalised in the coming months, one source said.
Two sources briefed on the matter put a potential deal size at roughly 4 billion to 5 billion ringgit (USD844 million to USD1.06 billion). In addition to its fuel stations, Shell also sells industrial lubricants, produces crude oil and natural gas offshore of Sarawak and Sabah states, and is a joint venture partner in two liquefied natural gas (LNG) ventures.
On top of that, the sale is part of CEO Wael Sawan’s efforts to focus the company’s operations on the most profitable businesses. Shell has said it would look to divest 500 gas stations this year and next. It is in the process of selling its Singapore refinery and petrochemical complex.
Shell’s effort to sell its Malaysia fuel stations is consistent with its move to sell its refinery on Bukom Island in Singapore, which supplies the network, one of the sources said. Well, it looks like there will be more Malaysian land owned by another country now.
What’s more, Saudi Aramco does not have fuel stations in Malaysia, although it owns 50 percent of the 300,000-barrel per day (bpd) Pengerang refinery in Johor in a joint venture with Petronas, which sells fuel domestically and for export. Aramco operates petrol stations in Saudi Arabia and also operates fuel stations elsewhere in joint ventures with French major TotalEnergies and South Korea’s S-Oil Corp.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
