Chevron Corp. announced the signing on Thursday of an agreement by its subsidiaries in Belgium, Netherlands and Luxembourg (Benelux) to sell the companys fuels marketing business for $460 million to Dutch company Delek Benelux B.V., a subsidiary of Israels Delek Petroleum. Chevron said it will retain its lubricants, aviation, fuel and marine marketing, Oronite additives and upstream businesses in Europe.
The sale, subject to regulatory approval, is expected to be completed during the third quarter of 2007.
Under the agreement, Delek will acquire Chevrons Benelux fuel marketing operations, which include 803 Texaco-branded service stations, two fuel terminals in Belgium and Luxembourg, interests in six joint venture retailers in the Netherlands, as well as other related assets.
Stephanie Price, Chevrons corporate media advisor, global downstream, said the companies do not expect redundancies in terms of employees after the sale.
Its anticipated the vast majority of the Benelux marketing employees and a number of support group employees will move with the business being sold to Delek upon completion of the sale, Price told Lube Report. So any remaining employees will most likely be retained by Chevron, so its actually a fit for both companies people.
Price said the company doesnt anticipate that the Benelux fuels sale will have an impact on Chevrons lubricants business in Europe.
Geeta Agashe, director of Kline and Co.s Petroleum and Energy Practice, agreed, telling Lube Report, I see no significant impact on lubes market share in the future as well – I mean, as opposed to if this business was sold to say, Total or BP, who already were leaders on the lubes side.
According to Agashe, Kline and Co.s estimates for the Benelux market, the Chevron brand – primarily the Texaco brand – ranks as number three in commercial automotive and industrial segments and number five in consumer auto segments.
Price said that the sale ofChevron’s interests in the Nerefco Refinery to BP and its Benelux sales agreement with Delek supports the companys strategic objective to improve shareholder returns by focusing resources and capital investments on maintaining leading positions in areas where it has market and supply strength. Chevrons Pembroke refinery in the U.K. also remains an important part of the companys global refining portfolio, said Price.
Chevron does not produce base oils in Europe, but did announce in February that it would begin supplying Europe with all viscosity grades of API Group II base oil from its plant in Richmond, Calif., by mid-year 2007. Supplying base oils to blenders of heavy duty engine oils meeting the new ACEA E9 specification coming in 2008 was a major goal for the undertaking.