Chevron nears sale of Egypt, Pakistan downstream assets

Chevron is in advanced talks to sell most of its downstream assets in Egypt and Pakistan, sources said, with the planned sales expected to raise around US$300 million for the U.S. oil major. Downstream operations of oil companies include refining and processing of crude oil, as well as the marketing and distribution of products.
Chevron, the second-largest U.S. oil company, is conducting a separate sale for its assets in both countries, banking sources said.
“Chevron is currently conducting a review of its fuel operations in Egypt and Pakistan,” Chevron spokesman Brent Tippen said.
“This includes our shareholding in Pakistan Refinery Ltd., as well as fuels marketing, in Egypt and Pakistan.”
However, the company said its lubricants businesses in Egypt and Pakistan were not included in the review. It added that no decision had been made to sell any assets.
The energy firm has received at least three non-binding bids for the assets from interested parties, which include regional and international energy companies, one of the sources said, declining to provide details of the bidders.
Some of the bidders are eying assets in both countries, the source said.
“They are small assets but [they] are profitable and gaining a lot of interest in the auction process. There are lots of buyers for whom owning these businesses makes perfect sense,” the source said.
Large oil companies are shrinking their downstream operations to focus more on high-margin exploration and production activities.
Royal Dutch Shell said in April that it was considering selling some of its Italian downstream assets including its retail, aviation and supply and distribution businesses. The company agreed to sell its Egyptian downstream assets to French energy firm Total in May.
Chevron operates under the Caltex brand in Pakistan and has more than 500 petrol outlets in the country. It is also active in the lubricants business.
Citigroup Inc. is advising Chevron on the sale process, according to the sources.
(May 23, 2013)