Shell to sell Argentina downstream business for $950m

Oil giant Shell has agreed to sell its downstream business in Argentina for $950m in cash to Raizen, which is a joint venture it set up with Cosan in 2011.

The sale includes the Buenos Aires refinery, around 645 retail stations, liquefied petroleum gas, marine fuels, aviation fuels, bitumen, chemicals and lubricants businesses, as well as supply and distribution activities in the country.

Once the deal closes, the businesses acquired by Raízen will continue their relationships with Shell through various commercial agreements, which represent an estimated value of $300m.

Shell Downstream director John Abbott said: "We plan to continue thriving in Argentina’s downstream market through Raizen.

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

Shell said the deal, which does not include its upstream interest in the Vaca Muerta shale formation, is consistent with its strategy to simplify its portfolio through a $30bn divestment programme, and follows a strategic review of its downstream business in Argentina that began in August 2016.

The agreement with Raizen is the result of a competitive bidding process and the sale is expected to complete later this year.

At 1415 BST, the shares were up 0.5% to 2,585p.