Shell to offload downstream assets in Argentina for $950m

Shell has entered a deal to sell its downstream business in Argentina to Brazilian biofuels producer Raízen for $950m.

Raízen is a joint venture (JV) between Cosan and Shell. It manages more than 6,000 service stations in Brazil.

Under the deal, Raízen will purchase the Buenos Aires Refinery and around 645 retail stations.

The transaction also includes Shell’s liquefied petroleum gas, marine fuels, aviation fuels, bitumen, chemicals and lubricants businesses, as well as supply and distribution activities in Argentina.

Once the sale is complete, the divested businesses will continue to be associated with Shell through various commercial agreements, which are worth around $350m.

The move is part of Shell’s $30bn divestment programme and follows a strategic review of its downstream business in Argentina in August 2016.

Shell downstream director John Abbott said: “We plan to continue thriving in Argentina’s downstream market through Raízen.

“Raízen has already delivered significant value for us in Brazil and we will remain an important fuel supplier to Argentina under this deal.”

The transaction is expected to be completed later this year. Shell will continue to operate in the country through its upstream interests in the Vaca Muerta shale formation.