New lease on life for Shell refining company
Dec 22, 2016
Port Dickson refinery handed over to new owners as sale of Shell Refining Company completes.
Kuala Lumpur, 22 December 2016 – Shell will continue its relationship with Shell Refining Company following the sale of Shell Overseas Holdings Limited (SOHL) 51% shareholding in the Shell Refining Company (SRC) to Malaysia Hengyuan International Limited (MHIL).
SRC will remain a refinery and MHIL will invest in upgrades to meet the locally mandated Euro 4M and Euro 5 requirements. The refinery will play a vital role in Shell Malaysia’s downstream supply chain and the overall security supply for Malaysia.
“This sale is in the best long term interest of Malaysia’s fuel supply. MHIL is a competent and experienced refiner with the technical and financial capability to take the refinery forward and continue its operations and in so doing safeguard jobs, giving SRC a new lease of life and securing the supply of fuel products to Malaysia. All of this is intended to benefit shareholders, Negeri Sembilan, and Malaysia,” said Datuk Iain Lo, SRC Chairman and Chairman of Shell Companies in Malaysia.
Shell is the leading retail fuels and lubricants provider in Malaysia, which remains an important market for the company. Shell will maintain supply to its retail and commercial customers, and will honour all current commercial arrangements through existing comprehensive supply agreements in the country.
This divestment is consistent with Shell’s strategy to concentrate its global downstream operations in areas where it can be most competitive. Shell continues to have a strong business in Malaysia – including an upstream presence particularly in deepwater, the gas-to-liquid (GTL) plant, Shell Middle Distillate Synthesis (SMDS) in Bintulu, and a leading downstream presence in retail fuels and lubricants.
“Shell has a long history in Malaysia and our business has grown and adjusted accordingly. We remain confident in Malaysia as an important country to the company despite the current challenging global economic landscape as well as lower crude oil prices. We believe we still have much to contribute to the development of the nation’s resources,” said Lo.
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Shell is a global leader in power, energy, and gas technology and is working to meet increasing energy demand and supply challenges by delivering smarter products and cleaner energy, infrastructure, and by developing new energy sources while addressing the impact on the environment. Malaysia is one of Shell’s heartlands. The history of Royal Dutch Shell in Malaysia started more than 120 years in Miri, Sarawak. Shell currently has a strong market presence in the upstream and downstream sector in Malaysia.
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