By Sarah Mcfarlane 

Royal Dutch Shell PLC said on Saturday that it sold its Martinez refinery in California to PBF Energy Inc. for $1.2 billion.

The deal supports Shell's intention to reduce its refining activity, after the company said in June that it plans to sell around half of its refineries globally. At that time it owned or had stakes in 19 refineries.

In recent years new refineries in countries including India and China have caused an oversupply of global refining capacity and weighed on profits. In Europe, the push toward cleaner energy and falling oil demand has threatened refineries and made them harder to sell.

Shell's refining and trading earnings roughly halved in the fourth quarter of 2019, compared with the same period a year before, its results showed on Thursday.

Shell said it would continue working with PBF Energy on a potential renewable diesel project that would use idle equipment at the Martinez refinery to create a renewable fuels production facility.

The sale included the continuing supply of oil products from the refinery to Shell's branded fuel business, which it retained.

The company's local aviation terminal and catalysts business were also not included in the asset sale, Shell said.

 

(END) Dow Jones Newswires

February 01, 2020 08:35 ET (13:35 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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