Royal Dutch Shell has agreed to sell its controlling stake in Tongyi Lubricants in China, in the energy company's latest step to restructure its global refining business.
Shell said it expects to complete its exit from Tongyi, in which it bought a 75 percent stake in 2006, by late 2015 or early 2016. The value of the sale to Huo's Group, its partner in Tongyi, and private equity firm Carlyle International, was not disclosed.
The Anglo-Dutch oil and gas company will remain present in China's growing lubricant industry, which produces liquids such as engine oils and greases.
"Our strategy remains to grow the business (in China) but what we want to do is grow the business using our brand and single business model," a Shell spokesman said.
In June 2015, Shell opened a lubricants blending plant in Tianjin with the capacity to produce 330 million litres of finished lubricants per year, enough to supply more than 65 million cars, according to the company.
Tongyi supplies and blends lubricants with plants in Xianyang in Shaanxi province and Wuxi in Jiangsu province.
Shell is in the midst of a global push to restructure its refining and trading, or downstream, division by focusing on a smaller number of assets and operations.
Over the past year, Shell has sold refineries and retail businesses in Australia, Italy, Britain, Denmark, Norway, France and Japan.
Shell plans to sell around $30 billion of assets between 2016 and 2018 to boost its balance sheet following the planned $70 billion acquisition of BG Group (BRGXF), expected to be completed by early next year.
(By Ron Bousso; Additonal reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier and David Holmes)