M&A

30 October, 2009

UPDATE 1-Shell says India's Essar in talks to buy refineries

LONDON, Oct 30 (Reuters) - Royal Dutch Shell Plc (RDSa.L) said it had entered exclusive talks with India's Essar Oil Ltd (ESRO.BO) on the sale of three European refineries, as the oil major refocuses its downstream operations on the United States and Asia.

"We are only talking to Essar," a spokesman said on Friday.

Shell put the plants at Stanlow in northwest England and at Heide and Hamburg in Germany on the market earlier this year and media reports have valued them at between 1 billion and 1.5 billion pounds ($2.48 billion).

Tight margins and falling fuel demand have prompted many big oil companies to offload European refineries and Shell's chief executive Peter Voser said earlier this month it was a challenging time at which to sell refineries.

The spokesman said it was unclear whether a sale would be concluded. Shell has said it could close refineries it has put on the block but which it fails to sell, or convert them into storage terminals. (Reporting by Tom Bergin; Editing by Greg Mahlich)

Source: http://www.reuters.com