Shell Australia is working to complete the $2.6 billion sale of its 120,000 b/d Geelong oil refinery and service station network to Switzerland-based trader Vitol by August 1, 2014, a company spokesman said Thursday.
The deal has been approved by the Australian government's Foreign Investment Review Board and the last details are now being finalized, the spokesman added.
Shell announced the sale of the Geelong refinery in the southeastern state of Victoria and its network of 870 service stations in February. The sale also covers Shell's bulk fuels, bitumen, chemicals and part of its lubricants businesses in Australia, but excludes its aviation supply operations and lube oil blending and grease plants in the Queensland capital Brisbane, which will be converted to bulk storage and distribution facilities.
Shell originally put Geelong up for sale in April 2012, citing its strategy to concentrate investment on world-scale facilities, such as the 500,000 b/d Pulau Bukom refinery in Singapore. The company converted its other Australian refinery, the 79,000 b/d facility at Clyde in the New South Wales capital Sydney, into an import terminal in September 2012.
Australia's refining and marketing sector has undergone significant restructuring in recent years. The industry is characterized by aged, small-scale facilities and all four refiners in the country -- BP, Caltex, ExxonMobil and Shell -- have struggled to compete with new, larger plants operating in the region.
Shell has not been alone in rationalizing its Australian refining assets. ExxonMobil mothballed its 78,000 b/d refinery at Port Stanvac in South Australia in mid-2003, and Caltex will convert its 135,000 b/d facility at Kurnell in Sydney into an import terminal later this year.
In April this year, BP announced it would close its 102,000 b/d Bulwer Island oil refinery in Brisbane by mid-2015. The closure of Bulwer Island will reduce the number of refineries operating in Australia to four: one each by ExxonMobil, BP, Caltex and Vitol.
The wholesale and retail sector has also seen rationalization and increased entry by independents and international players. The number of retail sites across the country has decreased from 20,000 in 1970 to around 6,300 in 2013, although the reduction in numbers has plateaued since the mid-2000s.
