Shell has signed an agreement to sell its downstream business in Argentina to Brazil's third largest energy company Raizen for $0.95 billion in cash proceeds at completion, the company announced Tuesday.
According to the announcement, the sale, subject to customary closing conditions, 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.
"Additionally, after the transaction closes, the businesses acquired by Raizen will continue their relationships with Shell through various commercial agreements, which represent an estimated value of $0.3 billion," the statement read.
Raizen, a joint venture set up in 2011 between Shell and Cosan, is a leading biofuels producer and fuels distributor in Brazil.
The company already manages more than 6,000 Shell service stations.
The sale does not include Shell’s upstream interests in the Vaca Muerta shale formation.
"Shell sees substantial long-term growth potential in Argentina’s shale resources," the statement said.
By Gulsen Cagatay