Texaco Jamaica up for sale
Published:Friday | November 26, 2010 | 12:00 AM
Mark Titus, Business Reporter
Chevron Corporation, owner of the Texaco brand, is seeking buyers for its remaining Jamaican and other Caribbean assets, the oil company said Thursday, but gave itself some wiggle room by calling it a "potential" sale.
But the company has already begun disposing of its Jamaican assets, well-placed sources have confirmed.
The disclosure follows Chevron's announced sale of its fuel-marketing and aviation businesses in the Eastern Caribbean and Central America to a French-owned petroleum operation in a deal to close next summer.
Vitogaz SA, a wholly owned subsidiary of RUBIS Group, will acquire 174 service stations plus an equity stake in an associated refinery, fuel terminal and aviation facility, and a commercial and industrial fuels business.
The terms of the deal were not disclosed but RUBIS describes the transaction on its website as a "US$300-million takeover of Chevron distribution activities in the Caribbean".
David Sterling, district manager at Chevron Caribbean, who operates out of New Kingston, says the oil company wants a less complex structure for its global operations and is in the process of soliciting bids for more regional operations.
Chevron, he said, was reducing its footprint in the region to invest its capital elsewhere in the global operation for better returns on investment and to strengthen its competitive position in a tough global industry.
"There are nine other Caribbean markets, including Jamaica, up for a potential sale," Sterling said via email.
He declined to speak further on the issue.
New owners
But the Financial Gleaner has learned that Chevron has already sold its local lubricant-distribution arm to a Guatemalan company called Lucalza, which specialises in the distribution of lubricants, filters and batteries.
The new owners took possession of the company, located on Marcus Garvey Drive in Kingston, on November 1. It will eventually be rebranded under the Lucalza name, the Financial Gleaner was told.
Chevron still operates 60 Texaco service stations in Jamaica, but it owns only a few, said a source who spoke on condition of anonymity, while the majority is owned by its dealers.
Chevron's operation is now mostly confined to distributing gas and aviation fuel, our source said.
Texaco's network of 60 stations positions it at No. 3 in the local gas-distribution market behind Cool Petroleum-owned Shell and Total SA.
The RUBIS/Vitogaz deal includes assets in Antigua and Barbuda, Barbados, Grenada, Dominica, St Lucia, St Vincent, Guyana, St Kitts, French Guiana, Martinique, Guadeloupe, Trinidad, Nicaragua, Costa Rica and Belize.
"There are still some countries in the Eastern Caribbean that were excluded from this, like St Martin Suriname and the US Virgin Islands," said a source close to the matter.
The sale is expected to close in the third quarter of 2011, pending regulatory approval.
Texaco also has assets in places such as the Dominican Republic, Puerto Rico, The Bahamas, The Cayman Islands, and The Turks and Caicos Islands.
The American oil giant sold its distribution operation in Haiti last year.
Chevron's asset sale follows that of Dutch-owned Shell and Exxon-Mobil-owned Esso over the past six years.
"This sale is in line with our ongoing effort to concentrate downstream resources and capital on strategic global assets," said Mike Wirth, executive vice-president, Downstream & Chemi-cals, Chevron, in a company-issued statement.
"By restructuring our worldwide portfolio, we intend to reduce capital employed, deliver stronger returns and achieve more profitable growth."
Chevron is one of the world's leading integrated energy com-panies whose roots trace back to 1879. Its name changed from Standard Oil on acquisition of Gulf Oil Corp in 1984.
Chevron later merged with the Texas Fuel Company, in 2001, which became known as The Texas Company, Texaco.
RUBIS, by contrast, was founded just two decades ago in 1990, and now has operations across Europe, Africa and the Caribbean. Its two core business lines are storage of liquid products, and distribution of LPG and petroleum products.