UPDATE: Shell Widens Talks On Sale Of European Refineries

Date : 04/28/2010 @ 8:25AM
Source : Dow Jones News

UPDATE: Shell Widens Talks On Sale Of European Refineries

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Royal Dutch Shell PLC (RDSB.LN) is still in talks with Essar Oil Ltd. (500134.BY) over the sale of three of its European refineries, but the company has also initiated talks with other parties, Chief Financial Officer Simon Henry said Wednesday.

Other potential buyers include private equity groups and state-controlled oil companies from outside Europe, he said.

Shell entered exclusive talks with Essar over the sale of the three refineries--Stanlow in the U.K. and the Heide and Harburg refineries in Germany--late last year, but talks between the companies have failed to reach a conclusion.

Essar Oil is planning an initial public offering in London that has delayed negotiations, Henry said.

"There are other interested buyers, no question," he said. "It's just a question of price. We are not looking for a fire sale...if we are not able to reach agreement on an acceptable price we will consider closure or conversion to a [storage] terminal," he said.

Several companies are looking to sell refineries in Europe, many of which have been loss making in the last six months due to weak demand for the products they make.

However, refining margins appear to have bottomed out in the fourth quarter of 2009.

Shell's own refining and marketing division showed a surprisingly strong swing back to a $778 million adjusted profit in its first quarter results announced Wednesday, from an adjusted loss of $427 million in the fourth quarter last year.

Company Web site: www.shell.com

-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com

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