Shell Plc has signed an agreement to sell Shell Neft LLC, which owns Shell’s retail and lubricants businesses in Russia, to PJSC LUKOIL, a statement from the company revealed, Thursday.
According to the statement, Shell Overseas Investments B.V. and B.V. Dordtsche Petroleum Maatschappij, both subsidiaries of Shell plc, signed the agreement, which includes 411 retail stations primarily in Russia’s Central and North Western regions, as well as the Torzhok lubricants blending plant about 200 kilometers north of Moscow.
“Our priority is the well-being of our employees,” said Huibert Vigeveno, Shell’s Downstream Director. “Under this deal, more than 350 people currently employed by Shell Neft will transfer to the new owner of this business.”
The comapny Neft’s retail network consists of 240 owned sites and 171 dealer-owned sites (and 19 Trademark License Agreement sites which are out of the scope of this transaction with Lukoil). Shell Overseas Investments B.V. and B.V. Dordtsche Petroleum Maatschappij own 100 percent of Shell Neft LLC.
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This development, according to the statement, follows Shell’s announcement in early March of its intention to withdraw from all Russian hydrocarbons gradually, and will be carried out in full compliance with all applicable laws and regulations.
Also on Friday, the company was reported to be in talks about selling its Shell Neft retail fuel station business in Russia, as well as an announcement that it would raise its quarterly dividend after posting its highest profit since 2008–a tripling of adjusted earnings from the same quarter last year to $9.1 billion.
“The acquisition of Shell’s high-quality businesses in Russia fits well into LUKOIL’s strategy to develop its priority sales channels, including retail, as well as the lubricants business,” said Maxim Donde, LUKOIL’s Vice President for Refined Products Sales.
Lukoil, founded in 1991, now operates globally with core upstream assets in Russia and is regarded as one of the world’s largest publicly traded, vertically integrated oil and gas companies in terms of proven hydrocarbon reserves and production; and Russia’s second largest crude oil producer.
The sale is expected to be completed later this year, subject to regulatory approval, the statement said.
