Shell divests its LPG business in France to focus on a single market with a streamlined operation

Thread Content

On November 2, oil giant Royal Dutch Shell announced that it had sold its Butagaz LPG business in France to DCC Energy for 446 million euros (approximately 513 million dollars). 　　Shell stated that its other businesses in France, such as aviation, commercial aircraft, lubricants, retail, and asphalt, will not be affected by this sale. Meanwhile, Shell revealed that it has sold 75% of its stake in Uni-Lubricants in China to Horseshoe Group and KKR. However, Shell did not disclose the price of this sale, and the Unify lubricants business has once again returned to the Hoechst Group. 　 Shell stated that the decision to divest the aforementioned businesses is in line with Shell’s strategy of focusing on downstream capital and markets, which will make the company more competitive. Shell will also continue to divest its LPG business in global markets. As early as 2014, Shell China sold its 67% stake in the joint venture BP (Fujian) Petroleum Co., Ltd. to its joint venture partner Fuzhou China Resources Gas Co., Ltd., with the transfer completed on October 16. At that time, Shell stated that BP had now completely withdrawn from its bottled and bulk liquefied gas business in China. With the widespread use of pipeline natural gas, LPG, which was widely used in the past, has been gradually replaced. Considering the high costs of importing resources and the high operating expenses in local markets that Shell faces in its current LPG business, as well as the shrinking market outlook, Shell’s preemptive strategy of divesting from LPG is proving to be forward-thinking. Shell’s sale of its LPG business in France is a further step in pursuing its earlier strategy of eliminating non-core operations and focusing on oil products. It is foreseeable that as Shell gradually divests its LPG business across the country, it will allocate greater financial resources and strength to the markets and areas in which it focuses its efforts.