ExxonMobil sells refining and fuels marketing business in Malaysia to San Miguel Corporation of the Philippines

ExxonMobil, owner of Esso and Mobil brands, has agreed to sell its interest in three businesses operating in the Malaysian downstream petroleum sector to San Miguel Corporation (SMC) of the Philippines. The deal is reported to cost SMC up to US$610 million in total or RM1.8 billion. It was previously reported that Boustead Holdings (owner of BHPetrol) and Shell Malaysia were among those interested in taking over ExxonMobil’s fuel stations.

The sale to SMC includes ExxonMobil’s 65% stake in Bursa listed Esso Malaysia Berhad (priced at US$206 million, much lower than market value), which operates a refinery in Port Dickson, as well as its wholly-owned ExxonMobil Malaysia Sdn Bhd and ExxonMobil Borneo Sdn Bhd affiliates. The latter two are involved in the retail, industrial and wholesale and aviation fuels businesses.

The physical assets in the transaction include the 88kbd capacity PD refinery which processes an average of 45,000 barrels of crude a day, equity interest in 10 fuel distribution terminals (7 of which are active) and around 560 retail fuel stations. Just last year, ExxonMobil spent a substantial RM90 million in a gas station upgrading exercise.

Despite the change of ownership, the refining, distribution and fuels marketing businesses will continue to operate as they do today under the new shareholder. The Esso and Mobil brands will remain in the market place for up to three years to facilitate SMC’s transition to a new retail fuels brand. The youngest fuel brand at present is BHPetrol, born out of BP’s sale of its retail business to Boustead in 2005.

However, this isn’t a total exit from Malaysia. The sale doesn’t affect ExxonMobil’s upstream interests in the country, where it is active in oil and gas exploration and production through ExxonMobil Exploration and Production Malaysia Inc. Also not included in the sale are the marketing and sales of chemicals, lubricants, and asphalt products, as well as the operations of the ExxonMobil Kuala Lumpur Business Support Center. ExxonMobil’s history in Malaysia dates back to 1893.

Some might know the name as a beverage maker, but San Miguel Corp is a huge Filipino conglomerate and the parent company of Petron, the largest oil refining and marketing company in the Philippines.

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