Energy trader Vitol and investment firm Helios are negotiating to acquire equity in Shells downstream businesses in 19 countries in Africa, including lubricants businesses in each of the countries except Egypt.
Under the terms of the proposed deal, which would see the Shell brand and products remain in each country, Vitol and Helios would become the majority shareholders in the businesses, with Shell retaining a shareholding, a Shell spokesperson told Lube Report yesterday. Shells fuels, lubricants and refining activities in South Africa, its lubricants business in Egypt, its LPG businesses in South Africa and Botswana, and its exploration and production businesses, liquefied natural gas interests and most international trading activities in Africa are not in scope of the proposed deal.
The Vitol Group July 21 confirmed its negotiations with Shell Oil Products Africa, noting they are subject to final negotiations and any necessary regulatory and final company approvals.
Vitols potential acquisition of equity will be in partnership with Helios Investment Partners, a major investment firm focusing on Africa and one of the few independent pan-African private equity investment firms to be founded and managed by Africans, Vitol stated. Under the terms of the agreement, Vitol said, Shell will not be holding discussions with any other third party for the time being.
The negotiations cover Shells downstream businesses in Morocco, Tunisia, Egypt (excluding lubricants), Cote dIvoire, Burkina Faso, Ghana, Togo, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Tanzania, Botswana (excluding LPG), Namibia, Madagascar, Mauritius and La Reunion. Downstream businesses include lubricants, retail and commercial fuels, liquefied petroleum gas, bitumen, aviation and marine. The businesses in South Africa include 1,300 retail sites, retail sales of around 3.5 million cubic meters, and 1.2 million cubic meters of terminal storage.
In April, Shell Oil Products Africa announced a review of ownership options for its downstream businesses in 21 countries in Africa. At the time, the company said it was part of Shells drive to refocus its global downstream footprint into fewer, larger markets.
The Vitol Group was founded in 1966 in Rotterdam, Netherlands. Its trading portfolio includes crude oil, oil products, LNG, natural gas, coal, power and carbon emissions. The company says it trades with all major national oil companies, the integrated oil majors and independent refiners and traders.
Established in 2004, Helios Investment Partners is a London-based, Africa-focused private investment firm. Helios portfolio companies operate in more than 20 countries, and in various industrial sectors, across the African continent.