Shell enters talks for sale of Malaysian refinery

Royal Dutch Shell PLC has entered discussions with China’s Shandong Hengyuan Petrochemical Co. Ltd. (SHP), Shandong, regarding the possible sale of subsidiary Shell Overseas Holdings Ltd.’s (SOHL) majority interest in Shell Refining Co. (FOM) Bhd.’s (SRC) 125,000-b/d refinery in Port Dickson, Malaysia.

While SOHL is in discussion with SHP for the sale of its shares in SRC, it has not reached any final agreement with SHP or any other party, SRC’s board of directors said in a Jan. 22 regulatory filing to Bursa Malaysia.

To date, SRC has neither received any offers for the company’s shares nor any notice related to the potential transaction, as recently was reported by some media outlets, according to the filing.

Additionally, SRC has not made any decision whether or not to convert the Port Dickson refinery into a storage terminal, the company added.

This latest filing follows SRC’s announcement last year that it was investigating long-term options regarding the future of the refinery, which included its potential sale, closure, or conversion to a storage terminal (OGJ Online, Jan. 14, 2015).

SRC’s decision to reevaluate ongoing operation of the refinery stems from a determination by its board in September 2014 that regional refining margins would remain depressed due to overcapacity in the global refining industry.

Contact Robert Brelsford at

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