Attock Petroleum to bid for Chevron’s downstream fuel business in Pakistan

Attock Petroleum Limited, Pakistan’s third-largest oil distributor, said it has decided to make a bid for Chevron’s downstream fuel business in Pakistan, as well as the latter’s stake in Pakistan Refinery Ltd.
In a filing with the Karachi stock exchange, Attock said: “APL has decided to participate in the acquisition of Chevron’s marketing affiliates in Pakistan (excluding lubricants business) and about 12% shareholding in Pakistan Refinery Ltd.”
The company did not provide further details in the filing.
The decision by the APL Board appeared to have been prompted by the completion of due diligence which the company had announced it was to conduct last year, local media reported.
APL is the second party to announce interest in Chevron’s downstream fuel assets in Pakistan. Byco Petroleum Limited is believed also to be in the process of conducting due diligence for the acquisition.
Chevron, in a securities analyst meeting in March 2012, said that it was reviewing its Egypt and Pakistan fuel businesses and expected to make a decision on the future of those operations.
Chevron has 538 retail fuel outlets in Pakistan that operate under the Caltex brand name. The company’s share in the Pakistani retail fuel market comes to about 5%, behind Pakistan State Oil, Shell Pakistan and Attock Petroleum. In addition to its retail outlets, Chevron has 12 storage depots with a total capacity of about 12,000 metric tons, an 11% stake in a cross-country oil pipeline and a 12% stake in Pakistan Refinery Ltd.
The oil major has operated in the Indian sub-continent since 1938. It is presently engaged in the fuels, lubricants, CNG and LPG business in Pakistan.
Attock Petroleum, a subsidiary of the Attock Group, has about 331 retail fuel outlets and a market share of around 8%. The Attock Group also owns Attock Refinery Limited and National Refinery Limited.
Pakistan consumes around 20 million metric tons of oil products annually, of which only about 13% is met through local resources, with the rest imported.
Chevron has a strong position in the high margin lubricants segment (23% market share). It remains to be decided if Chevron will sell its lubricants business separately to fetch a better price.