TPG circles in $3b sale of Shell petrol stations

[csv8]

TPG circles in $3b sale of Shell petrol stations

Date
January 8, 2014



Private equity firm TPG is in the final stages of a $3 billion auction for Royal Dutch Shell's refining and retail business in Australia, along with a consortium involving Macquarie Group.

There is also speculation a third party - potentially an Asian energy business - is also vying for the Shell assets, including its refinery in Geelong, several import terminals and a network of 900 branded service stations.

BP is also thought to be mulling the sale of its downstream business in Australia as the oil majors seek to channel investment into higher-returning businesses in oil and gas production and bigger growth markets.

''Production growth, or lack thereof, is the key focus of investors in the supermajors and therefore money is always going to be ushered more and more upstream away from the downstream,'' Credit Suisse analyst Mark Samter said.
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Both Shell and BP have declined to comment on the speculation about the potential sales. But a BP spokesman said that only last month the British parent company had sanctioned $US150 million of investment for 2014 in the Australian retail business, while maintenance work due this year at its Kwinana refinery in WA was expected to cost tens of millions of dollars.

Refineries have delivered sub-standard investment returns in Australia in the past five years but there is speculation an Asian energy business, such as Thai-owned PTT, might be interested. The 110,000-barrels-a-day Geelong refinery has previously attracted interest from Chinese interests in the sale process run by Merrill Lynch.

It is believed Shell's retail partner in Australia, Coles, is monitoring the negotiations.

Analysts said that the distribution and retailing end of the majors' Australian businesses would be of significant interest to new investors, particularly private equity, but that the refineries would be more problematic to sell.

''Now Australia is a net importer of fuel we are very attractive from the point of view of regional and international investment in the Australian market for those companies, unlike BP and Shell, which are really upstream companies rather than downstream marketers,'' said Nic Moulis, chief executive of the Australian Convenience and Petroleum Marketers Association.

He said Mobil had kicked off the trend several years ago for energy majors to exit the ''chips and chocolate'' business of fuels retailing in Australia to focus on exploration and production and it was unsurprising Shell and BP were thinking of following suit.

Mr Samter said petrol and diesel importing and retailing was a ''very obvious market for private equity to be looking at'' given ''enormous synergies'' on offer from parts of the business.

''There's a serious appetite for these types of assets, they are very high quality, defensive, pretty high visibility; it's a competitive market but it's a rational market,'' he said, noting Australia stood out among developed countries as still having growth in fuels retailing.

Australia's fuels production and retailing sector has seen massive change over the past decade, with the closure of two refineries and a third to be closed next year and significant changes in the ownership of petrol stations.

The changes have accelerated in the past 18 months with the entry of giant commodities trader Trafigura into petrol retailing in Australia through more than $800 million of acquisitions by its Puma arm, owned 40 per cent by Angolan state oil company Sonangol.

Caltex Australia, the only locally listed refiner and marketer, is in the middle of a major transformation, with its Sydney refinery to be converted to an import terminal this year and an increased focus on importing, distribution and marketing.
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Read more: http://www.smh.com.au/business/tpg-c...#ixzz2piNAhyf7

[GASWAGON]

Definitely HUUUUGE changes in the last decade......So that's why Mobil bailed years ago.

I CANNOT believe we are now importing most of our fuel....No wonder prices are going up not down!

[Bossxr8]

Hopefully the Geelong refinery sells, and continues on as a refiner and not an import terminal. With Alcoa's decision on wether they will stay or go here, it's so important for the refinery to stay on cause the last thing this town needs is more industry shutting down.

[GASWAGON]

Originally Posted by Bossxr8

Hopefully the Geelong refinery sells, and continues on as a refiner and not an import terminal. With Alcoa's decision on wether they will stay or go here, it's so important for the refinery to stay on cause the last thing this town needs is more industry shutting down.

OMG even ALCOA are talking about bailing.....I used to service some of the big dump trucks down there at Angelsea when doing my apprenticeship......

Then I used to go driving in the company vehicle for a few hours lol!

[janddbone]

Things are getting so terrible. The end seems sad.

[GASWAGON]

Originally Posted by brett.r.johnstone

Things are getting so terrible. The end seems sad.

Wait until import prices start going up? We'll be just like UK/NZ!

[ILLaViTaR]

It's just greed it'll never end. Why buy in Frankston North (perfectly solid investment) when you can get better yield/growth in inner Sydney? Or better yet a 500k valued property off a dying cancer patient with no family for only 50k!! Where do you draw the line?

The most lucrative industry in the world pushing the limits of society peaking over the last 10 years and it still expects linear growth (aka to retain this ridiculous inflation). I bet if people stopped using their product until that forced reduced prices they'd find some magical way to sustain their "marginally viable" industry on the lower revenue.

[red_hotxr6]

Doesnt australia have its own oil fields down between port lincoln and melbourne?? I thought we produced alot of it??

[Bowser22]

Originally Posted by EF_6

OMG even ALCOA are talking about bailing.....I used to service some of the big dump trucks down there at Angelsea when doing my apprenticeship......

Then I used to go driving in the company vehicle for a few hours lol!

The Pt.Henry smelter is at the mercy of the AU$ and metal prices even with tonnage, safety and efficiency records broken this past year. However it is not at the bottom of Alcoa's loss making smelters.
It's amazing the difference between the Anglesea/Geelong communities and Portland in regards to Alcoa. Almost all of Anglesea and plenty in Geelong want Alcoa dead and buried whereas Portland love Alcoa to pieces. I don't get it

[Road_Warrior]

Originally Posted by Bowser22

The Pt.Henry smelter is at the mercy of the AU$ and metal prices even with tonnage, safety and efficiency records broken this past year. However it is not at the bottom of Alcoa's loss making smelters.
It's amazing the difference between the Anglesea/Geelong communities and Portland in regards to Alcoa. Almost all of Anglesea and plenty in Geelong want Alcoa dead and buried whereas Portland love Alcoa to pieces. I don't get it

Yeah you don't hear much about the ALCOA refinery in Kwinana either. The Wagerup (Pinjarra) refinery is in the media occasionally, but usually due to emissions complaints from residents.

[Agile]

it's all about return on investment. Absolutely NOTHING else matters. NOTHI G

[Road_Warrior]

One of the things I noted from my time in the industry is that the majors (and most of the independents for that matter) don't "compete" unless they really have to. They don't (well, didn't IIRC) collude much if at all, but they won't rock the boat with retail prices unless there is a nutjob independent servo or chain who is prepared to cut the prices in order to grab market share and develop a reputation amongst consumers as being best for prices.

This ****** the majors off because it erodes their retail margins and interrupts the "status quo" and forces them to compete if they want to retain market share. In the past though, the majors had such enormous financial depth, they were simply able to hold retail prices low when the weekly price cycle came to an end; the independents could not withstand several weeks of this behaviour and had to raise the white flag because they could not rely on profits from one region to carry another that was in pricing stress.

That and dirty tricks like interrupting supply from terminals that were owned or controlled by the majors from which independents obtained fuel supplies. I'd say the ACCC put a stop to that though.

Its probably heaps different now but I'd bet some aspects are similar if not the same.

[GASWAGON]

Originally Posted by Bowser22

The Pt.Henry smelter is at the mercy of the AU$ and metal prices even with tonnage, safety and efficiency records broken this past year. However it is not at the bottom of Alcoa's loss making smelters.
It's amazing the difference between the Anglesea/Geelong communities and Portland in regards to Alcoa. Almost all of Anglesea and plenty in Geelong want Alcoa dead and buried whereas Portland love Alcoa to pieces. I don't get it

Well if they do go I cannot see Geelong and the district surviving along with the Ford plant closure aswell???

Gunna be hard times down ther for sure!

[pajoda]

Originally Posted by red_hotxr6

Doesnt australia have its own oil fields down between port lincoln and melbourne?? I thought we produced alot of it??

We do, but pretty sure its all light crude, we need some of the heavy stuff for petroleum.

[Bowser22]

Originally Posted by Road_Warrior

Yeah you don't hear much about the ALCOA refinery in Kwinana either. The Wagerup (Pinjarra) refinery is in the media occasionally, but usually due to emissions complaints from residents.

That's just it. They've been very silent. They have been singing praises for the Portland smelter but have been very quiet about Pt.Henry and both alumina refineries. I will put my job on the line (literally) and say Pt.Henry wont be operating in 12 months and there'd have to be at least 200 non Alcoan jobs that will go with it. At least the ex alcoaworkers will be at the front the centrelink queue

[bobthebilda]

Originally Posted by red_hotxr6

Doesnt australia have its own oil fields down between port lincoln and melbourne?? I thought we produced alot of it??

Australia only produces about 30% of the oil (petrol) it consumes. And depending on what type it is and where it comes out of the ground, means that it can be refined in oz or refined overseas. With the likes of moomba and bass strait slowly dying off, imports will be making up a greater percentage in coming years.

[rjr]

Originally Posted by bobthebilda

Australia only produces about 30% of the oil (petrol) it consumes. And depending on what type it is and where it comes out of the ground, means that it can be refined in oz or refined overseas. With the likes of moomba and bass strait slowly dying off, imports will be making up a greater percentage in coming years.

I was doing a bit of research on pipelines in Queensland in the last couple of weeks and I found out that the Moonie pipeline has closed down.

There is some sort of small refinery at Moonie making diesel but I don't know a lot about it.