Energy giant Shell is reportedly in discussions with Saudi Aramco, the state-owned oil company of Saudi Arabia, to divest its gas station business in Malaysia, which constitutes the second-largest network of its kind in the country.
According to Reuters, the potential deal could be valued at up to $1 billion.
While both Shell and Saudi Aramco declined to comment on the talks, Shell acknowledged that Malaysia holds strategic importance. The company fully owns approximately 950 fuel stations across the Southeast Asian nation, making it the second-largest network after Malaysia’s state-owned Petronas.
Negotiations commenced in late 2023, and sources suggest that a deal may be finalized in the coming months. Estimated deal size ranges from approximately 4 billion to 5 billion ringgit ($844 million to $1.06 billion), as per Reuters.
In addition to its fuel stations, Shell engages in the sale of industrial lubricants, offshore crude oil, and natural gas production in Sarawak and Sabah states. It also holds joint ventures in two liquefied natural gas (LNG) projects.
The divestment aligns with CEO Wael Sawan’s strategy to streamline Shell’s operations and prioritize profitability. Shell aims to divest 500 gas stations this year and next, alongside the ongoing sale of its Singapore refinery and petrochemical complex.
The move to offload its Malaysian fuel stations echoes Shell’s decision to divest its assets in Singapore, as reported on Friday by Energy Afrique.
While Saudi Aramco currently lacks a presence in Malaysia’s fuel station sector, it holds a 50% stake in the Pengerang refinery in Johor, operating in a joint venture with Petronas.
Aramco operates petrol stations domestically in Saudi Arabia and has joint ventures with TotalEnergies and S-Oil Corp in other regions.
