Chevron May Sell Eastern Refinery and Gas Stations
Chevron Corp. said Thursday that it might sell its Philadephia refinery and 4,000 gas stations in 12 Eastern states to help reduce its huge $14.1-billion debt.
A spokesman for the San Francisco-based oil company said that it is circulating an information package among potential buyers but that a formal decision to sell the Northeastern refining and marketing assets hasn’t been made.
But industry analysts said Chevron has been trying since late last year to sell the refinery, which it acquired when it purchased Gulf Oil for $13.3 billion last fall. John Curti, an analyst with the investment firm of Birr, Wilson in San Francisco, said it is logical for Chevron to withdraw from the East.
“It follows the whole industry trend to restructure, slim down and pay debt,” he said.
That trend was accelerated 2 1/2 months ago when Atlantic Richfield said it was withdrawing from the East. It subsequently sold its Philadelphia refinery and several hundred gas stations in 12 states. Los Angeles-based Arco supplied gasoline to about 2,000 Eastern gas stations, half the size of Chevron’s Northeastern retail network, which runs from Maine to Virgina.
Chevron also owns a closed refinery and a terminal in Perth Amboy, N.J., which it said it is also willing to sell. A Chevron spokesman said the company would prefer to sell the Northeastern assets as a package.
Meanwhile, Chevron said it has received a number of inquiries from possible buyers of its 60% stake in Gulf Canada in the wake of the collapse of a deal to sell its share of the Canadian oil and gas production company for $3 billion (Canadian).
The prospective buyer, Olympia & York, a huge Toronto-based real estate firm controlled by the Reichmann family, lost a $25-million deposit when it allowed its purchase option to expire Wednesday. It wasn’t clear why the Reichmanns decided not to buy Gulf Canada, and Olympia & York didn’t return phone calls Thursday. But Chevron granted Olympia & York the option to pull out of the deal if it couldn’t solve certain tax and legal problems associated with the purchase.
Chevron declined to say who was now interested in buying Gulf Canada. Oil industry analysts said Chevron may be forced to sell Gulf Canada piecemeal, since few Canadian companies are big enough to swallow the entire firm, which is valued at $5 billion. Some analysts speculated that Olympia & York may make another offer for the company.
“It could be time just ran out on them,” said William Magee, who follows Gulf Canada for Nesbitt Thompson Bongard, a Canadian investment firm.
