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Shell has struck a deal to promote its stake in a German refinery co-owned with Russia’s Rosneft because it continues to chop ties with Moscow and reshape its refining portfolio.
The FTSE 100 oil and gasoline large is promoting its 37.5 per cent stake within the PCK refinery in Schwedt, north-east Germany to the London-based oil provide conglomerate Prax Group.
The Schwedt refinery is 54.17 per cent owned by Russia’s state-owned oil firm Rosneft, though the German authorities took management of that stake final yr to attempt to shore up vitality provides following Russia’s invasion of Ukraine.
The refinery provides roughly 90 per cent of Berlin’s oil demand and was provided with crude from Russia till Germany stopped importing Russian oil in January 2023 in response to the warfare.
The refinery, which is ready to course of about 12mn tonnes per yr, is now provided by Kazakhstan in addition to seaborne imports by way of the ports of Rostock, Germany and Gdansk, Poland.
Shell stated the sale was a part of the corporate’s technique to chop down its international refining portfolio and deal with massive websites built-in with its chemical substances and buying and selling companies.
“This is another important milestone,” stated Machteld de Haan, government vice-president for chemical substances and merchandise at Shell.
The firm additionally introduced in March 2022 that it could “withdraw from its involvement in all Russian hydrocarbons” together with exiting its service stations and different operations in Russia.
It has since withdrawn from the Sakhalin-2 liquefied pure gasoline undertaking in Russia’s far east in addition to the Salym oilfield undertaking in Western Siberia, saying it now not has any joint ventures with Russia’s state-owned Gazprom in Russia. It bought its service stations within the nation to Lukoil in May 2022.
Neither social gathering gave a price for the deal, which is predicted to shut within the first half of subsequent yr, pending regulatory approval and associate rights. The third shareholder in PCK is Eni, which owns 8.33 per cent.
Prax Group is attempting to increase into Europe after rising to prominence within the UK with its buy of the Lindsey Oil Refinery in North Lincolnshire, England from Total in 2020.
In November, it purchased Germany-based Mabanaft’s petrol retailer Oil! Tankstellen, which has 340 websites in Germany and neighbouring nations.
Sanjeev Kumar Soosaipillai, chair and chief government of the Prax Group, stated the acquisition of the Schwedt refinery “provides us with a solid platform in the heartland of Europe from which to continue our expansion strategy”.
The PCK refinery got here on-line in 1964, rapidly establishing itself as core to the area’s economic system and important to massive shoppers corresponding to Berlin’s worldwide airport.
https://www.ft.com/content/1b74d969-a1fa-4566-adbf-0703568ac5d7