SHELL yesterday officially handed over the operations of its 62 petrol stations here to convenience store giant 7-Eleven - thus completing a strategic U-turn by the two largest oil companies in Singapore.

Last month, ExxonMobil handed over the reins of its 74 stations to NTUC FairPrice.

The two oil giants popularised the concept of convenience stores at petrol kiosks in the 1980s, transforming grimy counters selling cigarettes and car battery water to brightly lit air-conditioned outlets that were well-stocked and always open.

They were profitable ventures, and carved for the oil firms a slice of the convenience store market, estimated to be worth $300 million a year.

But times have changed.

Mr Josef Waltl, Shell's international executive vice-president of retail, said that for Shell to maintain its position as a market leader, it needed "new and simpler business models".

He said it is now "a global strategy to focus our energy on fuels", which represent Shell's strength.

"We're not a food company. We'd have to put considerable resources into building up a convenience store chain that offers food," he told The Straits Times.

"We recognise that there are better companies out there - like 7-Eleven - which can do the job better."

He said Shell has similar partnerships in "about half a dozen" markets out of 90 worldwide, and they are working well.

In Australia, where it has partnered retailer Coles Myer since 2003, fuel sales have "grown very substantially".

Last month, Shell struck a similar deal with the Reitan Group, owner of the 7-Eleven franchise in Scandinavia.

Some 270 Shell stations in Norway, Sweden and Denmark will be 'rebranded' next year.

As for the remaining two oil firms here - Singapore Petroleum Company has 39 kiosks and Caltex, 33 - both have said they have no plans to follow suit. For now.