Chevron returns to Australia fuel retail with $288 M asset
Chevron Corp’s Australian unit said it would buy the domestic commercial and retail fuels business of Puma Energy for A$425 million ($288 million), marking a return to the country’s fuel distribution market.
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 $463 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 $3.7 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, Chevron’s 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 $500 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.
“It’s 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 $200 million in early October to a Trafigura joint venture. Puma also sold its small business in Indonesia for $3 million and it is still evaluating its portfolio.
Puma’s other shareholders include Angola’s state oil firm Sonangol with 28% and Cochan Holdings, which is run by a former Angolan general, with 15%.
$1 = 1.4736 Australian dollars Reporting Melanie Burton in Melbourne; Additional reporting by Aby Jose Koilparambil in Bengaluru and Julia Payne in London; Editing by Tom Hogue and Arun Koyyur, Kirsten Donovan
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