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26 July 2010

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WINDHOEK – Vitol Group, the world’s largest independent energy trading company, has confirmed that it is involved in exclusive discussions to buy all of Shell’s retail and distribution units in 19 African countries, including Namibia.

Vitol wants to have majority ownership in all business units, although Shell would remain with a minority shareholding and retain the Shell brand.

Vitol is pursuing the discussions with Helios Investment Partners, a major investment firm focusing on Africa and one of the few independent pan-African private equity investment firms founded and managed by Africans.

“Under the terms of the exclusivity agreement, Shell will not be holding discussions with any other third party other than Vitol and Helios for the time being,” Vitol said in a statement.

If successful, the deal would, for the first time, place Vitol in the end-user oil market.

The Vitol Group has grown rapidly to become a major participant in the energy markets, trading more than 5.5 million barrels of crude oil and oil products a day.

It has more recently expanded its activities into other areas of energy to include liquefied natural gas (LNG), coal power and carbon emissions trading teams. Although Vitol has been trading in Africa for more than 40 years, any deal with Shell to move into the retail sector marks a new direction for the company.

The scope of the negotiations is Shell’s downstream businesses of retail, commercial fuels, lubricants, liquefied petroleum gas (LPG), bitumen, aviation and marine and these are business units in Morocco, Tunisia, Egypt (excluding lubricants), Cote d’Ivoire, Burkina Faso, Ghana, Togo, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Tanzania, Botswana (excluding LPG), Namibia, Madagascar, Mauritius and La Reunion.

Shell’s assets in the 19 countries are around 1 350 retail sites employing 2 500 permanent workers.

In Namibia, Shell employs, directly and indirectly, close to 700 workers. The company has close to 40 retail outlets dotted around the country.

Shell and BP announced in April this year their intention to divest from downstream businesses in African countries. The two petroleum companies want to focus on exploration activities.

Vitol is one of the world’s largest energy traders with revenue of around US$143 billion as of 2009. The company trades more than five million barrels of crude oil and refined products a day.

Besides crude oil, Vitol’s businesses include gasoline and naphtha, fuel oil, gas oil and jet, coal, power among others. The company has exploration and production assets, which include operations in the Philippines, the Democratic Republic of Congo (DRC), Ghana, Nigeria, Russia, Azerbaijan and Kazakhstan.

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