US-based Chevron Pakistan Limited is exiting its fuel retail and storage business in Pakistan by selling it to Total Parco Pakistan Limited and the process is expected to be completed in the first half of 2014.
According to sources, Total Parco struck a deal on August 8 with the Chevron group for acquiring Chevron Pakistan’s fuel business, including a 12% shareholding in Pakistan Refinery Limited as well as fuel marketing.
However, Chevron has kept its lubricant business and will establish a company to market this product.
The sale of the fuel retail business is part of a strategy to dispose of Chevron’s downstream assets in Egypt and Pakistan. Sources said Chevron may have sold its fuel business at $180 million.
“The transaction is subject to regulatory and court approvals and is expected to be completed in the first half of 2014,” a source said, adding the fuel business of Chevron Pakistan mainly comprised the retail network of service stations, commercial fuel sales and storage facilities.
“This acquisition is in line with the global strategy of the Total group and Pak-Arab Refinery Limited (Parco) – its partner in Pakistan – and demonstrates a commitment to further investing in the country and delivering high-quality fuel and services to its customers,” commented a company official.
“It also reflects the confidence and trust that Total and Parco have in the strong development potential of Pakistan,” he said.
An official of the Oil and Gas Regulatory Authority (Ogra) – the oil and gas industry regulator – told The Express Tribune nobody from the management of Total Parco or Chevron had approached it for the transfer of marketing business.
Chevron, in a briefing to securities analysts in March last year, said it was reviewing its Egypt and Pakistan fuel businesses and was going to take a decision on the future of these operations.
Chevron Pakistan is a wholly-owned subsidiary of Chevron Corporation, one of the world’s leading integrated energy companies. Headquartered in San Ramon, California, Chevron has operations in more than 100 countries.
In Pakistan, Chevron has 538 retail fuel outlets that operate under the brand name Caltex. The company’s share in retail fuel market of Pakistan is about 5%, lagging behind Pakistan State Oil, Shell Pakistan and Attock Petroleum.
In addition to the retail outlets, Chevron has 12 storage depots with a total capacity of about 12,000 tons, an 11% stake in a cross-country oil pipeline and a 12% stake in Pakistan Refinery Limited.
Total Parco – a joint venture between France’s Total and Parco that started operations in 2001 – is establishing a network of state-of-the-art retail stations across Pakistan. The company, with over 260 retail stations at present, plans to add 30 new stations per year until 2020.
Published in The Express Tribune, August 13th, 2013.
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Is the $180 million for the Pakstan assets only or for the Pakistan + Egyptian assets?
Chevron itself certainly did not show any interest in growing the business in Pakistan so it is good that a committed private sector company has bought it and hopefully will be able to contribute positively towards growing the business. I wonder about the deal amount though, 180 million is that the total deal amount including storage depots, refinery and pipeline shares or just the fuel business as mentioned ?