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Shell, Vitol and Helios reach agreement on African downstream businesses

Shell today announced it has agreed to divest the majority of its shareholding in most of its downstream businesses in Africa to Vitol and Helios Investment Partners for a total consideration of some $1 billion. Under the agreements, Shell will retain equity in two new joint venture companies, which will assure continued availability of Shell fuels and lubricants in 14 African countries under the Shell brand.

“This is a good deal for our customers as well as for Shell,” said Mark Williams, Royal Dutch Shell’s Downstream Director.  “We will significantly reduce our capital exposure in line with our strategy to concentrate our global downstream footprint, and continue to provide the high quality Shell products that our African customers have come to trust and rely on over many decades.”

“We are delighted to have concluded this agreement with Shell and Helios,” said Ian Taylor, President and CEO of the Vitol Group. “Africa is a continent we know well.  These two new ventures allow us to invest in Africa and its fast-growing economies, and grow all the businesses under the umbrella of the world-class Shell brand for the benefit of our customers.”

“We are pleased to enter into this landmark agreement with our partners, Shell and Vitol,” said Tope Lawani, Managing Partner of Helios Investment Partners.  “We believe that combining Vitol's world class supply expertise and Helios' deep understanding of the African operating environment with the Shell brand and a highly professional workforce will create significant new growth opportunities for the business, and will ensure the continued supply of high quality products and services for African consumers.”

One joint venture will own and operate Shell’s existing oil products, distribution and retailing businesses in 14 African countries, with the potential to add five more in future.  Vitol and Helios will hold 80% of the venture and Shell will hold the remaining 20%.  A separate company, which will be 50% owned by Shell and 50% by Vitol and Helios, will own Shell’s existing lubricants blending plants in seven countries and will manage macro-distributor relationships in each of the countries where the main venture operates, plus a number of others.

Shell, Vitol and Helios will now concentrate on securing necessary regulatory approvals and integration planning, ahead of a phased completion of the proposed deal during 2011 and the first half of 2012.

Enquiries

Shell Media Relations
Global Media Relations: +31 70 377 3600

Shell Investor Relations
The Hague: +31 70 377 3996 / +44 207 934 3856
US: +1 713 241 1042

Notes to editors

The deal covers existing Shell downstream businesses (Retail, Commercial Fuels, Liquefied Petroleum Gas, Lubricants, Bitumen, Aviation and Marine) in Morocco, Tunisia, Egypt (excluding lubricants), Cote d’Ivoire, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius.  Shell’s downstream businesses in Namibia, Botswana, Togo, Tanzania and La Reunion are under review for potential inclusion in the deal at a later date.

Shell’s fuels, lubricants and refining activities in South Africa, the company’s lubricants business in Egypt and its exploration and production businesses, liquefied natural gas interests and most international trading activities in Africa are not part the proposed deal. 
 

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges.  Shell companies have operations in more than 90 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit www.shell.com 


The Vitol Group
was founded in 1966 in Rotterdam, the Netherlands. Since then the company has grown significantly to become a major participant in world energy markets and is now one of the world’s largest independent energy traders.  Its trading portfolio includes crude oil, oil products, LNG, natural gas, coal, power and carbon emissions. Vitol trades with all the major national oil companies, the integrated oil majors and the independent refiners and traders. Globally Vitol trades over 5.5 million barrels of crude oil and products per day.

In addition to its trading business, and its 50% share in the storage and terminals business, VTTI, with 11 terminals on five continents, Vitol has an exploration and production business which includes interests in Ghana, Cameroon, Philippines, Kazakhstan, Russia and Azerbaijan. It also currently owns and operates over 100kbd in refining assets.  Further details on Vitol are available on www.vitol.com


Helios Investment Partners is an Africa-focused private investment firm. Helios operates a family of funds and their related co-investment entities, aggregating more than $1.5 billion in capital commitments, pursuing a full range of investment types, including business formations, growth equity investments, structured investments in listed entities and large scale leveraged acquisitions across Africa. The firm also managed the $110 million Modern Africa Fund on behalf of a range of investors which included the U.S. government's Overseas Private Investment Corporation and several leading U.S. corporations.

Established in 2004 and led by co-founding partners Tope Lawani and Babatunde Soyoye, Helios is one of the largest investment firms focusing on Africa and is among the few independent pan-African private equity investment firms to be founded and managed by Africans.

Helios' portfolio companies operate in more than 25 countries, and in various industrial sectors, across the African continent. The firm has significant experience in private equity investing across a broad range of industries and investment types - leveraged buyouts, recapitalizations, joint ventures, seed-stage venture capital, restructurings, and strategic public equity investments.

Limited partners in Helios' funds include several leading global investment funds, endowments and foundations, family offices, high net-worth individuals and development finance institutions, the latter of which include the UK's CDC, the US government's Overseas Private Investment Corporation, and the IFC, the private sector arm of the World Bank.  Further details on Helios Investment Partners can be found at www.heliosinvestment.com.

Cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this press release “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this press release refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this press release, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This press release contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this press release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2009 (available at www.shell.com/investor and www.sec.gov). These factors also should be considered by the reader.  Each forward-looking statement speaks only as of the date of this press release, February 19, 2011.  Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this press release.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions.  We may have used certain terms in this press release that SEC's guidelines strictly prohibit us from including in filings with the SEC.  U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

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