Global integrated energy company, Chevron Corporation (CVX) has signed an initial agreement with the mid- and down-stream unit of Trafigura Beheer BV – Puma Energy – for the sale of its fuel marketing business in Namibia. The financial terms were not disclosed.
The deal does not include Chevron’s lubricants business and will not involve the company’s operations in South Africa, Botswana or Swaziland. The transaction is expected to be closed following regulatory and government approvals.
With this acquisition, Puma will add 26 fuel service stations, additional bulk fuel storage facilities, and an array of industrial customers to its existing business in the country.
San Ramon, California-based Chevron is engaged in oils and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses.
This transaction is a part of Chevron’s initiatives to trim its less lucrative refining/marketing operations and concentrate on the high profit generating exploration and production business. In this regard, the company is already in the process of selling various downstream properties in more than 20 counties, including Spain, Caribbean and southern Africa.
In March, Chevron entered into a deal with Valero Energy Corporation (VLO) for the sale of its U.K. subsidiary Chevron Limited, comprising Welsh refinery Pembroke and marketing and logistics assets. Chevron will receive a total cash consideration of $730 million for the 220,000 barrels per day capacity refinery and approximately $1 billion for inventories and other related assets.
Chevron also aims to streamline its refining asset portfolio in Central America, while continuing to operate downstream activities in the stronger North American and the Asia-Pacific markets.
We expect the stock to perform in line with the broader market and maintain our long-term Neutral recommendation. Chevron currently retains a Zacks #3 Rank (short-term Hold rating).
CHEVRON CORP (CVX): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment