Total SA and Parco to buy Chevron's retail distribution arm in Pakistan
18 September 2013
French energy giant Total SA and its joint venture partner Pak Arab Refinery Limited (Parco) yesterday said they would buy Chevron Corp's retail distribution business in Pakistan, for an undisclosed sum.
Total Parco Pakistan Limited, the JV between Total and Parco, will acquire Chevron's fuel marketing, logistics and aviation business in the country.
Analysts expect the transaction to fetch the California-based company between $150 million to $175 million..
Chevron's assets in Pakistan include 538 retail outlets that operate under the Caltex brand name, two storage depots with a capacity of about 12,000 tons, an 11-per cent stake in a cross-country oil pipeline, a 12-per cent stake in Pakistan Refinery, aviation fuel and lubricant business.
For 2012, Chevron Pakistan had revenues of around Rs108 billion.
The deal includes Chevron's fuel retail distribution and storage business. The US oil giant will retain its lubricant business and will set up a company to market this product.
Oil giants are reducing their downstream buinesses like refining and processing, and fuel retailing to focus more on high-margin exploration and production.
Chevron had announced in March 2012 that it would exit the retail business in Australia, Egypt and Pakistan, as part of a global trend of major global oil companies shedding their downstream assets – refining, marketing and retail sales – to focus on the more profitable upstream businesses, such as oil and gas exploration and development.
Several Pakistani media reports had earlier said that Attock Petroleum, Pakistan's third-largest oil marketing company, Byco Petroleum, an oil refining and marketing company, Nishat Group, a diversified conglomerate with interests in banking, textiles, cement and power, and Total were contenders for Chevron's Pakistan assets.
Total purchased Chevron's Egyptian retail business in August.