Shell has taken a significant chunk out of its $30billion divestment plan total.
The oil major confirmed it has sold its 50% stake in the SADAF chemicals joint venture in Saudi Arabia to SABIC for $820million.
The sell-off is an early exit for Shell – the joint venture was due to expire in 2020. It comes 30 years after Shell’s buy-in to SADAF.
Graham van’t Hoff, executive vice president chemicals, Shell, said: “Our partnership with SABIC, spanning more than thirty years, has been a great success story. We’re proud to have established together one of the first petrochemical ventures in Saudi Arabia – it has grown substantially since the start, in 1986. We will continue to explore potential future opportunities with SABIC.”
The SADAF joint venture encompasses six petrochemical plants with a total output of more than 4 million metric tons per year.
Yousef Al-Benyan, SABIC vice chairman and CEO, added: “Since SABIC’s early days, we have enjoyed a strong relationship with Shell Chemicals. We are confident that our journey of partnership together will continue and grow in strength. With this transaction SABIC is looking to capitalize on synergy opportunities of SADAF with other affiliates, and improve its operation and profitability.”
Shell Chemicals sells more than 17 million metric tons of petrochemicals each year to its customers. It has refining-chemicals plants are in Singapore, Netherlands, the US Gulf Coast and Canada.
Shell outlined plans to sell-off $30billion worth of assets in the wake of its mega-takeover of BG Group.
In December last year, the operator said $1.65billion (£1.33billion) in asset sales.
Read: BP buys, while Shell sells – a recap of recent deal making by the majors here.
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