By Dinesh Nair
DUBAI May 21 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
Large oil companies are shrinking their downstream
operations to focus more on high-margin exploration and
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.