Aramco is in talks to acquire Shell’s gas station unit in Malaysia, Reuters reports, citing four sources it says have knowledge of the matter. The potential acquisition — which would mark the oil giant’s entry into the Malaysian fuel market — could be worth as much as USD 1.06 bn, the newswire reports. A final agreement could be hammered out in the coming months, following talks that reportedly began in late 2023, one of the sources said.

What’s on offer: The Shell-owned business is the second-largest network of its kind in Malaysia. The London-listed energy giant owns a total of 950 gas stations across the country, according to its website.

Shell has been offloading assets: Shell plans to divest 500 gas stations this year and next year as part of a rationalization drive led by CEO Wael Sawan. It is currently in the process of exiting from its refinery and petrochems facility in Singapore. The potential sale of its fuel retail business in Malaysia follows the sale of its refinery in Singapore, which supplies the network, according to one of the sources.

It wouldn’t be Aramco’s first venture into Malaysia: The state-owned oil giant holds a 50% stake in Pengerang refinery in Johor under a JV with Petronas. The complex produces up to 300k barrels of oil per day slated for local consumption and exports.

The oil giant has been making moves in the fuel retail market for some time: Aramco recently completed its acquisition of a 100% equity stake in Chile’s fuel distributor Esmax Distribución, marking its entry into fuel retailing in South America, in March. It is reportedly also mulling an entry into the fuel retail sector in Southeast Asia and Africa as it looks to tap countries with fast-growing economies. Late last year, Aramco inked a binding agreement to acquire a 40% stake in the oil retail company Gas & Oil Pakistan. It also set up a subsidiary Saudi Aramco Retail in 2018 as part of a strategy to bolster its downstream value globally.

On the local front: Aramco launched in 2021 with French oil giant TotalEnergies a joint retail network under a 50-50 JV that plans to invest USD 1 bn through 2025. The Aramco-TotalEnergies JV aims to expand fuel retail offering here, acquiring an existing network of 270 service stations from local Tas’helat Marketing Company and Sahel Transport Company.