Report: BP, Shell look to sell Australia refineries, gas stations


Royal Dutch Shell (RDS.A, RDS.B) and BP reportedly are considering the sale of refineries and gasoline stations in Australia to free up cash.

Shell is in preliminary talks with two parties about a A$3B ($2.69B) sale of 900 gas ­stations and its refinery in Geelong, according to the Australian Financial Review; BP is said to be examining a A$3B sale of its gas stations and refineries in Queensland and Western Australia.

The report also speculates that Chevron (CVX) may follow BP and Shell and sell out of its Australian service stations.

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Comments (8)
  • jimbrad101
    , contributor
    Comments (9) | Send Message
     
    Is it true that the profit margins on refining are small compared to the rest of the segments in this industry? Does anyone know whether this is particularly true in Australia?
    6 Jan 2014, 05:59 PM Reply Like
  • Those Who Wait
    , contributor
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    Anyone know why this is being done by three major oil companies? Would certainly like some insight.
    6 Jan 2014, 06:19 PM Reply Like
  • BTR2RSK
    , contributor
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    Yes, and why Australia in particular?
    6 Jan 2014, 09:21 PM Reply Like
  • aulraan
    , contributor
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    It is not cost effective to run these refineries in Australia. 1) BP and Caltex refineries in Brisbane, Queensland are very old. 2) Labour, operating and maintenance costs are high in Australia 3) due to these plants are located close to the cities, potential expansions of the plants to increase throughputs are impossible, not to mention the EPC cost, the environmental law and the union that each O&G companies have to go through. SHELL did the right thing by putting all its refining at Bukom Island, singapore. It is one of the largest refineries in the world and by consolidating all refining efforts at an island for South East Asia, it cut costs and cheaper to run it in Asia. Also less stringent on the environmental laws imposed on them and they can expand the plant easily by reclaiming the island. SHELL has already shut down a refinery at silverwater, nsw a year ago. And I foresee similar steps to be taken by BP and Chevron due to it is cost effective, easier to manage and more freedom for further expansion by consolidating all refining processes in Asia, especially in singapore.
    6 Jan 2014, 11:01 PM Reply Like
  • Alan Longbon
    , contributor
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    The key problem is the high cost of land in Australia, if you own the land you can sell now for a profit and deploy the capital more profitably somewhere else, if you are renting land on which you are running your business your margins are being eroded by the high relative rent cost and it makes no business sense to stay.
    7 Jan 2014, 08:49 AM Reply Like
  • Those Who Wait
    , contributor
    Comments (905) | Send Message
     
    Thanks for the info.
    7 Jan 2014, 02:55 PM Reply Like
  • jimbrad101
    , contributor
    Comments (9) | Send Message
     
    Thank you all for the comments.
    7 Jan 2014, 05:05 PM Reply Like
  • aulraan
    , contributor
    Comments (2) | Send Message
     
    http://seekingalpha.co...

     

    Hi all, an interesting brief article on XOM plan to expand its plant in Singapore.
    12 Jan 2014, 09:27 PM Reply Like
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