Shell

Coles will be watching any Shell deal closely. Photo: Luis Enrique Ascui

The battle for Royal Dutch Shell’s Australian service stations is heating up, with three consortia involving global investors such as Ontario Teachers’ Pension Plan and the Abu Dhabi ­Investment Council in the final stages of a $3 billion auction, reports The Australian Financial Review.

It is believed private equity firm TPG has teamed up with Ontario Teachers’ Pension Plan as well as the Kuwait Investment Authority.

Vitol, the world’s largest oil trader, and the Abu Dhabi Investment Council, are also working together.

Macquarie Group and Thailand’s PTT make up the third group.

Sources close to Shell said a deal could be signed as early as next week.

The Shell assets up for grabs include its refinery in Geelong, several import terminals and a network of 900 branded service stations.

Supermarket operator Coles is Shell’s retail partner in Australia and would be watching the negotiations closely. It is not clear whether a new owner of the assets would have to re­negotiate petrol supply and lease agreements with Coles.

BP is also mulling the sale of its downstream business in Australia as the oil majors seek to channel investment into higher-returning businesses in oil and gas production and bigger growth markets. BP’s chief economist told The Australian Financial Review in February 2012 that the future of the refining industry was dire, with excess global capacity and the rise of alter­native fuels sounding the death knell for many existing plants.

Analysts have weighed in, pointing out that Australian refineries are smaller, older and less complex than their international peers, which can take a variety of crudes. The strong Australian dollar has added to the pain.

Archer Capital got the ball rolling with the $625 million-plus sale of petrol retailer and distributor Ausfuel in February to Trafigura’s Puma Energy.

Shell, BP, Macquarie and TPG have declined to comment.

The Australian Financial Review