Chevron to sell downstream assets in Egypt, Pakistan
Chevron Corp is in advanced talks to sell most of its downstream assets in Egypt and Pakistan, three sources said, with the planned disposals seen raising around $300 million for the U.S. oil major.
Chevron, the second-largest U.S. oil company, is conducting a separate sale process for its assets in both countries, the banking sources said, speaking on condition of anonymity as the matter is not public.
Downstream operations of oil companies include refining and processing of crude oil, as well as the marketing and distribution of products.
"Chevron is currently conducting a review of its fuels operations in Egypt and Pakistan," Chevron spokesman Brent Tippen told Reuters in an email.
"This includes our shareholding in Pakistan Refinery Ltd, as well as fuels marketing, in Egypt and Pakistan."
However, the company said its lubricants business in Egypt and Pakistan was 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 eyeing assets in both the countries, the source said.
"They are small assets but 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, earlier in May.
New York-based oil and gas producer Hess Corp has announced plans to exit its retail gasoline, marketing and trading businesses after pressure from activist investors.
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.
The oil giant's first-quarter net income fell 4.5 percent to $6.18 billion due to lower oil prices, refinery downtime and high operating costs, it reported in April.
Citigroup Inc is advising Chevron on the sale process, according to the sources.