Chevron Sells Major Stake in Gulf Canada
Chevron said Friday that it has sold a majority of its holding in Gulf Canada for $1.8 billion as part of its effort to reduce the huge debt stemming from its acquisition of Gulf.
Chevron had announced a tentative agreement in late May to sell its 60% stake in Gulf Canada to Olympia & York Developments of Toronto, but the deal’s completion had been put off by the Canadian company.
Olympia & York bought four-fifths of Chevron’s 137 million shares in Gulf Canada and has an option to buy the remaining stock for $300 million by Dec. 2, Chevron said.
Olympia & York has extensive real estate holdings in both Canada and the United States. Its other holdings include a 93% stake in Abitibi-Price of Toronto, a leading producer of newsprint.
Regrets Having to Sell
Chevron Chairman George M. Keller said Chevron would remain active in Canada’s oil and gas industry through other affiliates in that country and regretted having to sell its interest in Gulf Canada.
“However, we are pleased that the proceeds from the sale will significantly accelerate our debt-reduction program,” Keller said.
Chevron, the nation’s fourth-largest oil company, obtained its stake in Gulf Canada when it completed the acquistion of Gulf earlier this year for $13.4-billion, the biggest corporate acquisition ever.
Keller said in early May that Chevron expected to cut its $14.1 billion in short-term debt by more than one-third over the next four years by selling assets.
Chevron sold Gulf’s refining and retailing operations in the Southeast to Standard Oil Co. (Ohio) earlier in the year, primarily as part of an agreement with the Federal Trade Commission for the agency’s approval of the merger.
Sold Pipeline Stakes
Chevron announced an agreement May 29 to sell Gulf’s 44-story Art Deco headquarters building in Pittsburgh to AGV Enterprises of New York. The terms were withheld pending final closing, which is scheduled for September.
Chevron also has sold its interests in two pipelines and is considering the sale of some of its producing properties.
In Toronto, Olympia & York said Gulf Canada would be changed into a holding company named Gulf Canada Enterprises Ltd., which would own the assets of Gulf Canada and Abitibi-Price.
Gulf Canada said that it was considering selling some of its refining and marketing assets but that no agreements had been reached with potential purchasers. Petro Canada, which is owned by the Canadian government, reportedly is interested in obtaining Gulf Canada’s marketing operations in western Canada.
