Chevron to Sell 450 British Service Stations to Shell

Chevron Corp. said Monday that it agreed to sell 450 service stations in Britain to the Royal Dutch/Shell Group, completing its plans to withdraw from the retail gasoline business in Britain.

The purchase of the stations and other assets of Chevron’s Gulf Oil (Great Britain) Ltd. unit would make Shell the largest gasoline retailer in Britain, giving it 2,150 gas stations. Esso, a division of Irving, Texas-based Exxon Corp., is now the leading seller with 1,980 stations. The transaction is worth about $100 million, analysts estimate.

San Francisco-based Chevron chose to leave the business in Britain after an attempt to negotiate a joint venture with France’s Elf Aquitaine and Murphy Oil Co. fell through earlier this year.

“When you are a marginal player, you either divest or you get bigger,” said Mark Gilman, a UBS Securities analyst. “Chevron has made the decision to focus its efforts elsewhere.”

Chevron wouldn’t disclose terms of the sale, which is expected to close in the fourth quarter assuming regulators approve. Its shares rose $3 to close at $87 on the New York Stock Exchange.

Shares of New York-based Royal Dutch rose $1.19 to close at $56.13, also on the NYSE.

Chevron warned in an earlier Securities and Exchange Commission filing that the sale could require a charge against earnings. The company declined to comment on that prospect Monday.

The sale further consolidates the European oil refining and retail gasoline industry, in which too many gasoline producers have been supplying a mostly stagnant market, eating away at profits.

Shell would get Chevron’s fuel stations in Britain, three fuel terminals and two fuel distributors. It also would buy Chevron’s lubricants blending business in Britain, except for a venture with Elf in Silvertown.

The companies have been negotiating a definitive agreement for the purchase since August, when Chevron said it would sell the remaining refining and marketing assets to Shell.

Chevron also said at that time it would close a refinery at Milford Haven in Wales, where it processes 115,000 barrels of oil a day. Texaco Inc. of White Plains, N.Y., will take over a jointly operated cracking plant that makes gasoline components at Pembroke.