The new owner of Shell’s downstream assets in Australia has guaranteed no jobs will be slashed under a $2.9 billion buy-out of its petrol stations and Geelong refinery.
Shell confirmed on Friday it had struck a highly anticipated deal with Dutch-owned oil giant Vitol covering its 870-site retail business and the refinery southwest of Melbourne, which employs 450 permanent staff and 150 contractors.
There had been fears a potential new owner could close the refinery and convert it into an import terminal.
But Vitol boss Ian Taylor gave assurances the operation would continue business as usual.
“As far as I’m concerned, all the jobs in Geelong are staying,” he said.
“We have no plans to shut; we’re here to run the refinery as a successful, profitable refinery.”
Shell told its refinery workers of the move on Friday morning.
It has had its Geelong refinery on the market since April 2013, and later broadened the sale to include Australian petrol stations.
The purchase also includes Shell’s bulk fuels, bitumen, chemicals and part of its lubricants businesses, but not the aviation business and the lube oil blending and grease plants in Brisbane, which remain within the group.
Shell branding will continue to be displayed on the service station network and its partnership with supermarket operator Coles will be retained.
“Australia remains important to Shell, but we are making tough portfolio choices to improve the company’s overall competitiveness,” said Shell CEO Ben van Beurden.
For Vitol, the deal represents a chance to snatch up a share of Australia’s lucrative oil market.
“That’s the sort of thing that you get when you buy a very high-quality business like this,” Mr Taylor said.
“You get a position … and that’s what we hope will make us competitive.”
Mr Taylor said one of Vitol’s longer-term plans included potentially building import terminals to meet the country’s demand as one of the region’s biggest fuel importers.
The Abu Dhabi Investment Council fund was also part of the successful consortium but details of its involvement have been kept confidential.
Australian Workers Union Victorian secretary Ben Davis said he would seek his own assurances from Vitol that jobs would be safe.
“We’re breathing a sigh of relief that the Geelong refinery will stay open, given the devastating news we had with Alcoa earlier in the week,” he said.
The sale is part of the Shell’s wider plan under Mr van Beurden to offload up to $US15 billion ($16.7 billion) of assets worldwide over the next two years.
In January Shell sold $1.3 billion of stakes in Chevron’s Wheatstone LNG project in Western Australia to the Kuwait Foreign Petroleum Exploration Company.
It has also flagged the potential divestment of its remaining stake in Woodside Petroleum.
Shell has recently offloaded refineries in the UK, Germany, France, Norway and the Czech Republic, and downstream businesses in Egypt, Spain, Greece, Finland, and Sweden.
It also created a downstream joint venture with Vitol and other partners across Africa, and sold some downstream businesses in Italy and Norway.
The Australian deal is subject to regulatory approvals and is expected to close in 2014.
