Shell in $2.6bn Australia asset sale

Fuel hoses at a Shell petrol station Shell saw a sharp decline in profits during the last three months of 2013

Oil giant Royal Dutch Shell has agreed to sell its Australian downstream business to oil trading firm Vitol for $2.6bn (£1.6bn).

The sale includes Shell's refinery in Geelong, 870 service stations, its bulk fuels and chemicals unit and part of its lubricants business.

However, Shell's aviation business is excluded from the deal.

Shell is looking to dispose off assets as part of a strategy that will see the company "changing emphasis" in 2014.

The asset sales also come at a time when its profits have been declining.

Last month, Shell posted 'clean' profits - which strip out the impact of oil price movements - of $2.9bn for the October-to-December quarter, down from $5.6bn during the same period a year ago.

"Australia remains important to Shell, but we are making tough portfolio choices to improve the company's overall competitiveness," Ben van Beurden, chief executive of Shell said in a statement.

Recent disinvestments by Shell include the sale of refineries in the UK, Germany, France, Norway and the Czech Republic.

The firm has also offloaded its downstream businesses in Egypt, Spain, Greece, Finland and Sweden.

Shell said that majority of its downstream staff in Australia will continue to work under its new owner.

The deal is subject to regulatory approvals and is expected to close within this year.

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