Shell announced last week the closing of the sale of its downstream assets in Argentina to Raizen - a 50-50 joint venture between the oil major and Brazilian sugar producer Cosan - under a deal announced in April of this year.
Raizen will pay $916 million for the assets, which include Shells lubricants businesses along with its Buenos Aires refinery. The deal also includes approximately 665 retail stations and operations involving liquefied petroleum gas, marine fuels, aviation fuels, bitumen and chemicals.
The Buenos Aires refinery includes one of Argentinas two base oil plants, an API Group I facility with capacity to make 1,500 barrels per day. Argentina is the second-largest lubricant market in South America, behind only Brazil. Shell said last year that it was the third-largest finished lube supplier in Argentina.
Established in 2011, Raizen is already the leading producer of sugar, ethanol and bioenergy in Brazil, and manages more than 6,000 Shell stations while selling approximately 25 billion liters of fuel per year. The company has a current turnover of around $24 billion a year.
Raizen outbid Argentinian energy company YPF, Chiles Quinenco SA and China National Petroleum Corps PetroChina for the assets, according to a Reuters report in April. Shell has already received $470 million of the payment, with the remaining sum to be paid by December 2019.
Business units acquired by Raizen in the deal will continue to honor previous commercial agreements with Shell as well as distribute Shell-branded products.
The sale came at the end of a two-year evaluation by Shell of its Argentina operations and is part of the companys strategy to simplify its portfolio through a $30 billion divestment program.