Is the writing on the wall for Tongyi? Image: Tongyi
Shell is planning on selling its stake in lubes producer Tongyi, which it acquired in 2006, for around $350-500m. The sale is part of a wider strategy to shed assets and raise cash as the price of oil continues to drop.
Following completion of the deal, Shell will still have more than 1,000 retail fuel stations, natural gas projects and other investments in the country.
The Anglo-Dutch major currently runs a larger lubricants business than any other international company operating in China, selling products for motorcycles, cars, trucks and other OEM functions under its Shell Helix and Rimula brands.
The company instantly tripled its share of the mainland lubricants market when it acquired the controlling 75% stake in Tongyi back in 2006 for an undisclosed amount.
After taking the top spot amongst the oil majors in January, Chief Executive Ben van Beurden laid out a plan to sell-off around $15bn worth of assets globally by the end of 2015. The deal, which offers a rare opportunity to access China's protective national energy market, has already attracted the attention of private equity giant Blackstone Group.
Published 21st December, 2014
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