Shell has agreed to divest its 37.5% stake in the PCK Schwedt oil refinery, a key fuel supplier for Berlin, to the British Prax Group. This move aims to conclude Shell’s co-ownership in the refinery, primarily owned by Russia’s Rosneft.
The decision to sell the stake gained momentum after the German government imposed trusteeship on Rosneft’s local units, controlling 54.17% of the refinery, following Russia’s invasion of Ukraine. Although Rosneft retains legal ownership, it lost control under trusteeship.
The trusteeship was extended due to stalled negotiations between Berlin and Rosneft on the Russian firm’s exit from Germany’s fourth-largest refinery. Poland advocated for Rosneft’s departure to pave the way for investors like PKN Orlen, to express interest in a controlling stake.
Shell anticipates the deal with Prax to conclude in the first half of 2024, pending regulatory approval and pre-emption rights by co-owners Rosneft and Italy’s Eni, which holds 8.33% in PCK Schwedt. The financial details of the transaction were not disclosed.
The move signifies a significant step for Shell towards a more focused refining portfolio and the development of high-value integrated sites, such as the Energy & Chemicals Park Rheinland, according to Machteld de Haan, Shell’s Executive Vice President for Chemicals and Products.
In a separate statement, Shell highlighted the refinery’s historical dependence on Russian oil via the Druzhba pipeline. However, since Germany took control in 2022 amidst sanctions, the refinery shifted to refining oil imported from Kazakhstan via Baltic Sea ports.
The Prax Group, a multinational independent oil refining, trading, storage, distribution, and retail conglomerate, emerges as the new buyer. Shell’s shares rose 0.8% to 2,540.00 pence each following the announcement in London.