Prominent oil company Royal Dutch Shell has made a deal to sell its controlling stake in the Chinese Tongyi Lubricants company, as part of an ongoing attempt to restructure its global business.
The company, which produces products including the Shell Tellus S2 M 32 hydraulic oil, has confirmed that it expects to finish its exit from Tongyi by early 2016 at the latest. Shell currently holds a 75% stake in the company, which they purchased in 2006, but has yet to reveal how much the sale of their stake to Huo’s Group and Carlyle International will bring in.
Despite the sale, Shell will still maintain a presence in China’s ever-expanding lubricant industry, which is currently known for producing engine oils and greases, in particular.
Speaking to Reuters, a spokesman for Shell said:
“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.”
Only a couple of months ago, Shell opened a plant in Tianjin for lubricant blending, which has enabled the company to produce around 330 million litres of lubricants annually, enough to keep 65 million cars running, according to the company.
This latest sale is part of ongoing efforts, which are also set to see the company sell approximately £19 billion of assets in 2016-18 in order to boost its finances after the planned acquisition of B.G Group, which Shell is expected to finalise early in 2016.
