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Summary
- Chevron looking to sell refinery stake amid global restructuring
- Refinery partner PetroChina has first right of refusal on stake
- Chevron also gauging interest to sell other Asia assets
- Stake value estimated in $300 million to $500 million range
SINGAPORE, (Reuters) – U.S. oil major Chevron has sought non-binding bids for the sale of its 50% stake in Singapore Refining Company (SRC), including from joint venture partner PetroChina, eight sources familiar with the matter told Reuters.
Chevron is also gauging interest for the sale of other assets in Asia, including terminal and fuel storage facilities in Australia and the Philippines, one of the sources and a separate source said.
The potential sales come as Chevron restructures globally to streamline operations and reduce costs, a process that could see it lay off up to 20% of its workforce by the end of next year.
Chevron has appointed Morgan Stanley to explore the sale of the SRC refinery in Singapore and other Asian assets, one of the sources said. Morgan Stanley declined to comment.
PetroChina, which owns the other 50% of SRC through its Singapore Petroleum Co Ltd unit, has first right of refusal to purchase Chevron’s share, three of the sources said.
“Chevron does not comment on commercial matters as a matter of long-standing policy,” a company spokesperson said.
PetroChina did not respond to a request for comment.
Other firms invited to review the refinery stake include global trading house Glencore, three of the sources said.
Glencore does not comment on market rumour or speculation, a company spokesperson said.
Buyers were asked to submit non-binding offers in July, the three sources said.
One of the sources put the value of Chevron’s stake in the Singapore refining business at hundreds of millions of dollars. Two industry experts not involved in the process gave estimated valuations for 50% of the plant ranging from $300 million to $500 million.
The SRC refinery has a crude processing capacity of around 290,000 barrels per day, making it the smallest refinery in Singapore. It includes seven shipping berths, all of which can handle very-large crude carriers (VLCCs), according to SRC’s website.
Last month, Chevron sold its stake in Chevron Phillips Singapore Chemicals to Aster Chemicals and Energy, a joint venture between Chandra Asri and Glencore.
A deal for the refinery would mark the second recent exit by a global major from the Singapore refining sector, which is subject to a carbon tax that has raised operating costs and reduced competitiveness with operators elsewhere.
In April, Shell completed the sale of its facility on Singapore’s Bukom and Jurong islands to the Chandra Asri-Glencore joint venture, exiting an operation dating to 1961.
Reporting by Trixie Yap, Yantoultra Ngui and Chen Aizhu; Additional reporting by Florence Tan; Editing by Tony Munroe and Tom Hogue
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