Shell sells stake in China's Sinopec

Oil giant Shell today boosted its balance sheet with the sale of its stake in China’s largest refiner for $742m (€608m).

The disposal of shares in Sinopec generated a profit of around €300m for Shell, which invested in the Beijing-based company at the time of its flotation in 2000.

In a statement today, the Anglo-Dutch giant said the disposal of its 2% stake did not weaken ties with Sinopec and that it remained committed to the oil and gas market in China.

The two companies signed a strategic alliance in 2000 and are co-operating on a number of projects in the world’s most populous nation.

These include the construction of a plant that turns coal into gas in the central province of Hunan.

The companies are also seeking final approval from the Chinese government for a joint venture for 500 petrol stations in the country.

Shell, which bought shares in Sinopec to help it gain a foothold in China, is the second of the world’s three largest listed oil companies to sell its stake in the company.

Rival BP last month completed the disposal of Sinopec shares in a deal arranged by investment bank Morgan Stanley. US oil giant ExxonMobil retains shares in the group.

Sinopec and rival refiner, PetroChina, supply nearly 90% of China’s oil consumption.