December 22, 2016
KUALA KUMPUR – Shell will continue its relationship with Shell Refining Company following the sale of Shell Overseas Holdings Limited (SOHL) 51 percent 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.