ExxonMobil, the world’s largest oil company, is believed to have its Australian operations – Mobil Australia – up for sale.
Apparently the sale process is being run out of ExxonMobil headquarters in New York, rather than through a local investment bank, and for that reason industry sources believe the buyer could be a new, foreign entrant rather than one of the existing players.
At the same time Wesfarmers is believed to be looking hard at whether it wants to be in the petrol retailing business that it acquired along with its acquisition of Coles.
The local and international oil companies are all poring through the Mobil books at present; if Coles’s 600 sites also come on the market, that could provide the ACCC with a big headache.
Mobil’s key assets are 800 retail sites, the Altona oil refinery, two terminals (the main one is at Yarraville in Melbourne) and a second refinery in Adelaide that was closed in 2003 and kept on care and maintenance.
The sale is part of a reassessment by ExxonMobil of its operations around the world.
Last month the company sold its business in Brazil to the big sugar and ethanol producer, Cosan Ltd, for $US1 billion. In Brazil, ExxonMobil had 1500 service stations operating under the Esso brand.
In Australia, Caltex would be very keen to buy the Altona refinery to add to its Kurnell refinery in Sydney and Lytton refinery in Brisbane to complete a sweep down the east coast.
There are seven oil refineries in Australia, the largest of which is Shell’s Geelong refinery. Presumably the ACCC would have something to say about Shell owning the Altona one as well.
The most controversial part of the sale is likely to be the 800 service stations, which is about 10% of the market, and comes just a few years after Australia’s big grocers – Coles and Woolworths – expanded into service stations, where they now dominate the market.
In some ways the natural buyer of the Mobil sites would be Coles, now owned by Wesfarmers, but that’s unlikely if Wesfarmers’ management is reflecting on whether it wants to be in the petrol business at all.
If that assessment leads to a decision to sell the company’s petrol network, then that would put more than a third of the nation’s service stations on the market at the same time.
While Caltex would probably be keen to buy the Altona refinery, and would be allowed to do so by the ACCC, it would be prevented from buying the Mobil service station network, given its dominance of the retail market with Woolworths.
For that reason a consortium bid for Mobil is seen as possible in some quarters.
In any case, the likely sale of Mobil Australia, and Wesfarmers’ reassessment of its petrol retailing operations, could see another big shake-up in the Australian oil business.
Ironically this comes at the same time as a shake-up in the other very politically sensitive business – banking – with Westpac bidding for St George and the others deciding whether to counter.
This story first appeared in Eureka Report
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