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Chevron returns to Australia fuel retail with USD288 M asset

December 26/2019

MOSCOW (MRC) -- Chevron Corpís Australian unit said it would buy the domestic commercial and retail fuels business of Puma Energy for AD425 million (USD288 million), marking a return to the countryís fuel distribution market, as per Hydrocarbonprocessing.

The sale by Singapore-based Puma Energy, 49%-owned by commodities trading giant Trafigura, comes as Puma pushes to rebalance its books after a decade-long spree snapping up oil assets. It reported a net loss of USD463 million in the first nine-months of the year.

For Chevron, the deal marks a return to a sector it left in March 2015 after selling its half-share in refiner Caltex Australia for USD3.7 billion. Puma has more than 270 retail sites, 20 depots and 3 bulk seaboard terminals across Australia and delivers more than 1 billion litres of fuel a year.

"The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth," Mark Nelson, Chevronís executive vice president for downstream and chemicals said in a statement.

The deal is expected to complete by the middle of next year.

Last month, sources familiar with the sale told Reuters that Trafigura would accept a hefty discount to the price it paid and that the assets would likely fetch no more than USD500 million, which they said would be a sharp drop in price.

Puma, which said it was retaining its bitumen business in Australia, entered the country in 2013 with the purchase of Ausfuel, Neumann and Central Combined Group assets. Media reports at the time said it paid around $850 million for the Ausfuel and Neumann assets.

Despite the potential scale of the price tag difference, some investors said the sale would be welcomed by Trafigura, which last week reported its lowest annual net profit in nearly a decade after a string of losses in its physical asset portfolio.

"Itís a pretty good deal for Trafigura," said a Melbourne-based fund manager, who declined to be named because he was not authorised to speak to the press.

It is the second major sale for Puma this year. The firm announced the sale of its Paraguay business for USD200 million in early October to a Trafigura joint venture. Puma also sold its small business in Indonesia for USD3 million and it is still evaluating its portfolio.

Pumaís other shareholders include Angolaís state oil firm Sonangol with 28% and Cochan Holdings, which is run by a former Angolan general, with 15%.

As MRC wrote before, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

We also remind that in March 2018, Chevron Phillips Chemical Company LP, part of Chevron Corp, successfully introduced feedstock and commenced operations of a new ethane cracker at its Cedar Bayou facility in Baytown, Texas. At peak production, the unit will produce 1.5 million metric tons/3.3 billion lbs. per year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, PP random copolymer, propylene, ethylene, petrochemistry, Chevron, Chevron Phillips, Phillips 66, Australia, Russia, USA.
Category:General News
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