Chevron returns to Australia fuel retail with A$425m deal

Its Australian unit acquires Singapore-based company Puma Energy's assets

Melbourne

CHEVRON Corp's Australian unit on Thursday said it would buy the domestic commercial and retail fuels business of Puma Energy for A$425 million (S$396 million), marking a return to the country's fuel distribution market.

The sale by Singapore-based Puma Energy, 49 per cent owned by commodities trading giant Trafigura, comes as Puma pushes to rebalance its books after a decade-long spree snapping up oil assets.

Puma booked a net loss of US$500 million for the year ended Sept 30. For Chevron, the deal represents a return to a sector it left in March 2015 when it sold its half-share in refiner Caltex Australia for US$3.7 billion.

Puma has more than 270 retail sites, 20 depots and three bulk seaboard terminals across Australia and delivers more than one billion litres of fuel a year.

"The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth," Mark Nelson, Chevron's executive vice president for downstream and chemicals said in a statement.

Last month, sources familiar with the sale told Reuters that Trafigura would accept a hefty discount to what it paid and that the assets would likely fetch no more than US$500 million, which they said would be a sharp drop in price.

Puma, which said it's retaining its bitumen business in Australia, entered the country in 2013 with the purchase of Ausfuel, Neumann and Central Combined Group assets.

Media reports at the time said it paid around US$850 million for the Ausfuel and Neumann assets.

Despite the potential scale of the price tag difference, some investors said the sale would be welcome for Trafigura, which last week reported its lowest annual net profit in nearly a decade after a string of losses in its physical asset portfolio.

"It's a pretty good deal for Trafigura," said a Melbourne-based fund manager, who declined to be named because he was not authorised to speak to the press. REUTERS

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