US oil giant Chevron Corp yesterday struck a deal to sell its Canadian gasoline stations and refinery in British Columbia to Parkland Fuel Corp, for C$1.46 billion ($1.09 billion).
The move comes a week after Reuters reported that Chevron is exploring the sale of its 20-per cent stake worth about $2.5 billion in Canada's Athabasca Oil Sands project. (See: Chevron explores sale of $2.5-bn stake in Athabasca Oil Sands project)
Under the terms of the deal, Parkland will acquire Chevron's 129 gasoline stations, three terminals in Burnaby, Hatch Point and Port Hardy, the Burnaby oil refinery that processes 52,000 barrels of oil a day, and a wholesale business which includes aviation fuel sales to the Vancouver International Airport.
Parkland, a marketer of petroleum products, will also pay an additional $186 million toward working capital for the acquired business.
Parkland plans to issue 24 million shares to raise $660 million to help fund the acquisition.
Parkland said that the new service stations will complement its existing 44 Chevron-branded sites in British Columbia and cement its position as one of Canada's largest fuel retailers with more than 1,800 service stations.
Chevron, the largest oil producer in the US after Exxon Mobil, is restructuring by selling assets, cutting jobs and delaying drilling projects after oil prices last year fell to the lowest level in more than a decade.
Last year, it sold its Indonesian and Philippines geothermal assets to Star Energy Consortium, part of Philippine property-to-banking conglomerate Ayala Corp, for a reported $3 billion, and last month agreed to sell its 75-per cent stake in its South African assets and its subsidiary in Botswana to China Petroleum and Chemical Corporation (Sinopec) for nearly $1 billion.
In February, China's state-run Zhenhua Oil signed a preliminary deal to buy Chevron's natural gas fields in Bangladesh that are worth about $2 billion.