September 28, 2023 [Yahoo Finance]- Shell is in talks with Poland’s Unimot to sell its 37.5% stake in the PCK Schwedt refinery in Germany, according to Reuters. This refinery is Germany’s fourth-largest and supplies 90% of Berlin’s fuel. The sale is part of Shell’s plans to divest from some of its downstream assets in Europe as it focuses on its upstream business and renewable energy.
The German government has been looking for a buyer for Shell’s stake since last year when it put Rosneft’s 54.17% stake in the refinery under trusteeship. The Russia government owns the majority of Rosneft.
Unimot is a Polish oil and gas company that has been expanding its international operations in recent years. The company has a strong track record of operating refineries and is seen as a credible buyer for Shell’s stake.
The talks between Shell and Unimot are still at an early stage and there is no guarantee that a deal will be reached. However, if successful, the deal would be a major step toward securing the future of the Schwedt refinery and its employees.
What Does This Mean for Shell?
The sale of Shell’s stake in the Schwedt refinery would allow the company to exit a difficult market. The refinery has been struggling since the start of the war in Ukraine, as it has been unable to source crude oil from Russia due to EU sanctions.
The sale would also allow Shell to focus on its core businesses, such as upstream oil and gas production, and downstream refining and marketing.
Implications for Unimot and Germany
The acquisition of Shell’s stake in the Schwedt refinery would be a major coup for Unimot. It would give the company a significant presence in the German market and make it a major player in the European refining sector.
The buyout would also help Unimot to secure its own crude oil supplies. The Schwedt refinery is connected to the Druzhba pipeline, which can transport oil from Russia, Kazakhstan and other countries.
The sale would be a welcome development for the German government. It would help ensure the future of the refinery and its employees, and would also reduce Germany’s reliance on Russian oil. It would also be a sign of the growing cooperation between Poland and Germany in the energy sector. The two countries have been working together to develop new energy infrastructure and diversify their energy supplies.
In conclusion, the talks between Shell and Unimot are a positive development for all parties involved. If a deal is successful, it would be a major step toward securing the future of the Schwedt refinery and its employees, and would also help reduce Europe’s reliance on Russian oil.
Zacks Rank and Key Picks
Currently, SHEL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI and USA Compression Partners USAC, both sporting a Zacks Rank #1 (Strong Buy), and Archrock AROC, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.39 billion. In the past year, its shares have risen 32.2%.
CVI currently pays a dividend of $2 per share or 5.93% on an annual basis. Its payout ratio currently sits at 30% of earnings.
USA Compression Partners is worth approximately $2.21 billion. USAC currently pays a dividend of $2.10 per unit or 9.33% on an annual basis.
The company offers natural gas compression services to oil companies and independent producers, processors, gatherers, and natural gas and crude oil transporters. It also operates stations.
Archrock is valued at around $1.97 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 4.94%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.
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