Shell Reportedly in Talks to Sell Petrol Station Business in Malaysia to Saudi Aramco

According to Reuters, Shell is reportedly in talks with Saudi Arabia’s state-owned Saudi Aramco to sell its petrol station business in Malaysia. Four industry personnel familiar with the matter have been cited as sources for this news.

Discussions are said to have commenced in late 2023, with a deal potentially being finalized in the coming months. Sources briefed on the matter estimate the deal to be valued at roughly four to five billion ringgit.

With approximately 950 stations across Malaysia, Shell holds the second-largest fuel retail network in the country after Petronas. Although Shell declined to comment on the talks, it emphasized the importance of Malaysia as a market. Similarly, Saudi Aramco refrained from commenting on the matter.

Aside from its fuel station network, Shell in Malaysia also engages in selling industrial lubricants, producing crude oil and natural gas offshore of Sarawak and Sabah, and participating in two liquefied natural gas (LNG) projects.

The potential sale aligns with Shell CEO Wael Sawan’s strategy to focus the company’s operations on the most profitable businesses. It appears that fuel retail may not fall within this category.

It remains uncertain whether Shell's Recharge DC and AC electric vehicle charging network and ParkEasy, in which Shell Malaysia holds a 50% stake, are part of the acquisition deal. However, it would seem impractical to retain Shell branding at Aramco stations for this purpose.

According to reports, Shell had previously indicated its intention to divest 500 stations this year and next, alongside the process of selling its Singapore refinery and petrochemical complex. The move to sell its Malaysia fuel station network is consistent with its plans to divest assets.

While Saudi Aramco does not currently operate petrol stations in Malaysia, it owns 50% of the Pengerang refinery in Johor in a joint venture with Petronas. The company only entered the petrol station business in 2019 and operates stations in JVs with TotalEnergies and S-Oil Corp.