Glencore agrees JV deal to supply Mexican fuel stations
LONDON (Reuters) -- Mining and commodities trading group Glencore is jumping into Mexico's recently opened energy sector, one of the hottest investment tickets in the industry, by setting up a retail station franchise and fuel supply deal with local group Corporacion G500 SAPI (G500), it said on Thursday.
Mexico abolished in 2013 state oil firm Pemex's decades-old monopoly on all oil production, refining and marketing, including retail markets.
Since then, the country has seen a flurry of investments.
On the retail side, this year alone, oil majors ExxonMobil and BP have announced plans to build new gas stations in Mexico and Royal Dutch Shell was quoted in local media as following suit.
"Our partnership with G500 expands our presence into downstream and retail businesses, a natural fit with our global supply capabilities," Alex Beard, head of Glencore Oil, said in a statement on Thursday.
The new franchise will be called the G500 Network and will provide fuel, branding and ancillary retail services to 1,400 fuel stations in Mexico, the company said.
Formed in 2014, G500 is an association of service station owners, established in response to the deregulation and represents around 12% of Mexico's service stations, selling around 160,000 bpd of diesel and gasoline.
"This partnership is creating an innovative franchise that will improve competition, product quality and services for the Mexican consumer," Antonio Caballero Fernandez, G500 president, said in the statement.
Unlike some of its competitors in oil, Glencore has so far steered clear of owning downstream assets like refineries and retail stations.
Vitol, the world's largest independent oil trader, has invested heavily in retail in the last few years and lately bought Turkey's retail group PetrolOfisi. Trading house Trafigura has a wide retail network focused in Africa with its majority stake in Puma Energy.
Reporting by Barbara Lewis; Additional reporting by Julia Payne; Editing by Greg Mahlich and Mark Potter
Comments