Glencore, a Swiss mining and commodities trading company, is in the running to acquire Shell‘s oil refinery and petrochemical units in Singapore, reported Reuters, citing sources.
This move comes after previous potential buyers withdrew their interest.
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The UK-based oil giant has been seeking a new owner for the assets, which include a refinery with a capacity of 237,000 barrels per day (bpd) and a one-million-tonne-per-year ethylene plant on Bukom Island, as well as a mono-ethylene glycol production facility on Jurong Island.
With the acquisition of the Bukom and Jurong assets, Glencore expects to build a significant physical presence in Asia’s primary oil hub.
The Swiss company is working with PT Chandra Asri Petrochemical of Indonesia on the potential acquisition.
However, the ageing facilities have been facing profitability challenges, particularly in the petrochemicals sector, and are up against stiff competition from newer refineries, especially in China.
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By GlobalDataShell initiated a strategic review of these assets in 2023 but has not issued any comments regarding the potential sale.
Glencore has declined to comment on what it describes as “market rumour or speculation”. Chandra Asri did not respond to requests for comment.
Morgan Stanley is the investment bank assisting Glencore with the potential deal, sources said.
It also declined to comment on the matter.
In December 2023, reports emerged that Shell had shortlisted at least four bidders including China National Offshore Oil Corporation (CNOOC), Vitol, Eversun and Befar Group to submit formal offers by the end of February.
However, high operational costs and the looming introduction of a carbon tax in Singapore have discouraged some interested parties.
According to sources, both CNOOC and Befar have since withdrawn from the bidding process.
Requests for comments from CNOOC, Befar and Eversun did not elicit a response and Vitol declined to comment.
Glencore has been interested in these assets since the early stages of the sale, sources said.
Glencore’s current refining portfolio includes a 100,000bpd facility in Cape Town, South Africa’s third-largest refinery, and a lubricants plant in Durban.
Goldman Sachs, tasked with managing the sale for Shell, also declined to comment on the news, reported the media outlet.
