Shell in Talks to Sell Malaysia Gas Station Business to Saudi Aramco for Up to $1 Billion

According to sources familiar with the matter, energy giant Shell is in discussions with Saudi Arabia’s state-owned Saudi Aramco to offload its gas station business in Malaysia, as reported by Reuters. This move could mark a significant shift in Shell’s strategic focus and potentially reshape the fuel station landscape in Malaysia.

With approximately 950 fuel stations, Shell holds the second-largest network in Malaysia, trailing only the state-owned Petronas. Talks between Shell and Saudi Aramco commenced in late 2023, with insiders suggesting a potential deal worth between 4 billion to 5 billion ringgit ($844 million to $1.06 billion).

Although both Shell and Saudi Aramco declined to comment on the ongoing discussions, the deal could signal a strategic realignment for Shell under CEO Wael Sawan’s leadership. Sawan has been vocal about focusing on the company’s most profitable ventures, with plans to divest 500 gas stations in the near future. This move in Malaysia aligns with Shell’s broader strategy of streamlining its operations, as evidenced by its recent efforts to sell its Singapore refinery and petrochemical complex.

The sale of Shell’s Malaysia fuel stations is not isolated but rather part of a larger restructuring initiative. Notably, it mirrors Shell’s divestment of its Singapore refinery on Bukom Island, which supplies the Malaysian network. This strategic synchronization suggests a deliberate effort by Shell to consolidate its operations and optimize profitability.

For Saudi Aramco, acquiring Shell’s gas station business in Malaysia presents an opportunity to expand its footprint in the region. While Aramco currently lacks a presence in Malaysia’s fuel retail sector, it holds a 50% stake in the Pengerang refinery in Johor through a joint venture with Petronas. This acquisition could complement Aramco’s existing ventures and bolster its position in Southeast Asia.

Aramco’s venture into Malaysia follows its established pattern of strategic partnerships in the fuel retail sector, including joint ventures with global majors like TotalEnergies and S-Oil Corp. This potential acquisition underscores Aramco’s commitment to diversifying its portfolio and capitalizing on growth opportunities beyond its domestic market.

As discussions between Shell and Saudi Aramco progress, industry analysts are closely monitoring developments, anticipating the impact on Malaysia’s fuel retail landscape and the broader implications for both companies’ strategic trajectories.