Saturday, 29 March 2025
Home Topics Business Shell faces delay in German refinery stake sale, sources say
BusinessNewsOilPoliticsTrade

Shell faces delay in German refinery stake sale, sources say

112
A view shows a logo of Shell petrol station in South East London, Britain, February 2, 2023. REUTERS/May James/File Photo
A view shows a logo of Shell petrol station in South East London, Britain, February 2, 2023. The oil giant had planned to sell its 37.5% stake in the Schwedt refinery to Britain's Prax Group, but lawsuits have delayed the sale. REUTERS/May James/File Photo

BERLIN/FRANKFURT/LONDON – Shell’s planned sale of a stake in the Schwedt refinery in Germany is being delayed by pending lawsuits by third parties, two people familiar with the matter said, stalling a divestment the company has waited years for.

The deal has been complicated by Berlin stripping Schwedt’s majority owner Rosneft of its control, but not its shares, following the severing of energy ties between Germany and Moscow in 2022.

Shell’s planned sale of its 37.5% stake to Britain’s Prax Group, was expected to close in the first half of 2024 “subject to partner rights and regulatory approvals”, but completion is still pending.

The sources said the agreement has a clause stating that if the deal isn’t closed by mid-September the parties need to agree an extension or renegotiate.

The delay stems in part from pending lawsuits, including an attempt by Rosneft to prevent the sale to Prax, one of the sources said, efforts that a German court this week said had little chance of success.

While the stake’s value was put at around €155 million to €190 million ($173-212 million) it was attributed a negative equity value of around €14 million, according to sources and deal documents reviewed by Reuters.

Tightened regulation

Shell said it is continuing to work with Prax on finalising the sale. Prax Group said it would not make any further comment until the transaction was completed.

Rosneft did not reply to a request for comment.

Concerned about potential political repercussions, Berlin has so far shied away from expropriating Rosneft in Germany, something it can theoretically do under tightened energy security regulation.

Shell has been wanting to get rid of its stake in the refinery, which supplies around 90% of Berlin’s fuel, for years and initially hoped to sell it to Vienna-based group Alcmene in 2021, a deal that was preempted by Rosneft.

A November ruling by the Berlin administration court that has given Alcmene, in theory, the green light to acquire Shell’s stake in Schwedt has further complicated the process, the source said.

Related Articles

Lilium burnt through huge sums while trying to develop its jet (AFP)

German flying taxi start-up’s rescue deal collapses

A German flying taxi start-up said on Friday it would halt operations...

FILE PHOTO: U.S. Secretary of the Interior Doug Burgum speaks as he attends a signing ceremony with members of the West Virginia Congressional Delegation at the EPA headquarters in Washington, D.C., U.S., February 18, 2025. REUTERS/Kent Nishimura/File Photo

US energy council chief says power plants to produce 15% more electricity

By Valerie Volcovici WASHINGTON (Reuters) – U.S. Interior Secretary and co-chair of...

Cuba has inaugurated a new solar energy park in the capital Havana (AFP)

Cuba opens solar park hoping to stave off blackouts

Cuba on Friday unveiled a new solar energy park in the capital...

FILE PHOTO: Cranes unload imported iron ore from a cargo vessel at a port in Lianyungang, Jiangsu province, China October 27, 2019. REUTERS/Stringer/File Photo

Iron ore heads for weekly gain on brightening demand outlook, China stimulus hopes

By Amy Lv and Lewis Jackson BEIJING (Reuters) -Iron ore futures prices...

Login into your Account

Please login to like, dislike or bookmark this article.