Saturday, September 21, 2013

Bye Bye Caltex! Total will acquire Chevron’s Pakistan retail network

Total-PARCO Pakistan Limited, a joint venture between Total and Pak Arab Refinery Limited (PARCO), will acquire Chevron’s fuel marketing, logistics and aviation business in Pakistan. The business includes 538 petrol stations, said sources declining to be named.

Total did not provide a value for the transaction. A spokesman for Chevron was not available for comment. Chevron operates under the Caltex brand in Pakistan and also has a lubricant business which was not put for sale.

Large oil companies are shrinking their downstream operations – which include refining and processing of crude oil, as well as the marketing and distribution of products – to focus more on high-margin exploration and production activities.

Royal Dutch Shell said in April it was considering selling some of its Italian downstream assets including retail, aviation and supply and distribution businesses.

The company agreed to sell its Egyptian downstream assets to Total earlier in May. New York-based oil and gas producer Hess Corp has announced plans to exit its retail gasoline, marketing and trading businesses after pressure from activist investors.

Chevron was nearing a sale of its downstream assets in Pakistan and Egypt, sources told Reuters in May, in a deal which was seen raising around $300 million for the US oil firm. The company was conducting separate sale processes for both the businesses, the sources said.

The second-largest US oil company confirmed at the time that it was conducting a strategic review of its fuels operations in Egypt and Pakistan. However, it said this did not include the lubricants business in Egypt and Pakistan.

Total said in August that it agreed to buy Chevron’s Egyptian retail network, in a move it said would create its biggest marketing and services subsidiary outside Europe.

Citigroup Inc advised Chevron on the Egypt and Pakistan sale process, according to the sources.

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