Royal Dutch Shell said on Monday it had agreed to sell its shares in Shell Refining Company in Malaysia to a unit of a private Chinese refiner for $66.3 million.
It marks the first overseas refinery acquisition by a private Chinese refiner, shortly after Beijing allowed dozens of the country's independent, small oil plants to import crude for the first time.
Shell will sell the 51 percent stake to Malaysia Hengyuan International Ltd, while the remaining shares are held by institutional and public shareholders, a Shell spokeswoman said.
Malaysia Hengyuan International Ltd is a unit of China's Shandong Hengyuan Petrochemical Company.
The transaction is expected to be completed in 2016, subject to regulatory approval, Shell said.
"It is (Malaysia Hengyuan's) intention for Shell Refining Company to invest in the upgrades needed to meet the Euro 4M and Euro 5 requirements," the company added, referring to cleaner fuel specifications.
Shell Malaysia Trading will continue to supply its retail and commercial customers in Malaysia and honour its existing commitments which include a long-term offtake deal from Shell Refining Company, it said.
Shell Refining Company is a key petroleum products supplier to Shell's downstream businesses in Malaysia, its website says.
The oil refinery at Port Dickson has a capacity of 156,000 barrels-per-day (bpd) with 90 percent of its oil products consumed within Malaysia.
Shell has been exploring options for the company including the sale of the Port Dickson refinery or converting it to a storage terminal since at least January, 2015.
"The sale is consistent with Shell's strategy to concentrate its global downstream footprint and businesses where it can be most competitive," the company said in a statement.
Shell said earlier this month that it could further cut combined capital investments below the $33 billion targeted for 2016.
Its asset sales in the past two years have amounted to more than $20 billion, far outstripping its original plan to make $15 billion worth of divestments.