Shell is considering the sale of its chemicals assets in Europe and the US, with Morgan Stanley conducting a strategic review, reported the Wall Street Journal, citing sources with knowledge of the matter.
The assets include Shell’s Deer Park facility in Texas, US, which produces a range of olefins used in products such as pharmaceuticals, adhesives and detergents.
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The Deer Park operation is next to a refinery where Shell sold its entire stake to joint venture partner Pemex, Mexico’s state oil operator. The company also operates chemical plants in Pennsylvania and Louisiana, the UK, Germany and the Netherlands
The review of Shell’s chemicals operations could attract interest from private equity and Middle Eastern companies. This move is part of CEO Wael Sawan’s strategy to focus on high-margin businesses, pivoting away from renewable power and towards oil, gas and biofuels.
The company’s shift in strategy has already led to the sale of its Singapore chemicals park and a refocusing on its core profitable sectors.
The potential sale is in line with Shell’s recent trend of divesting non-core assets. The company has warned of lower trading in its chemicals division, with CEO Wael Sawan emphasising cost-cutting and a return to profitability in oil and gas.
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By GlobalDataShell’s strategic review is still in the early stages, with no definitive decisions made. The company’s focus on profitability has led to green-energy targets being scaled back.
Earlier this month, subsidiaries Shell Offshore and Shell Pipeline Company agreed to acquire a 15.96% stake in the Ursa platform, pipeline and associated Gulf of Mexico fields from ConocoPhillips for $735m (£582.55m).
