(EnergyAsia, March 30 2015, Monday) — US major Chevron has sold off its entire long-held 50% stake in Australia’s largest downstream company for A$4.7 billion to focus on developing its core Gorgon and Wheatstoneliquefied natural gas (LNG) projects. (US$1=A$1.30).
Despite the exit, Chevron said in a statement it remains one of Australia’s largest foreign investors and the largest holder of natural gas resources in the country.
While the statement did not provide a value of its combined holdings in Australia-listed Caltex, which owns and operates refining, retailing, distribution and wholesaling assets, local and international institutional buyers bought the 135 million shares on offer for between A$34.2 and A$35 each.
The sale will mark a further reduction in Chevron’s participation in Asia’s downstream business since its Caltex joint venture with Texaco began expanding in the region in the 1930s. After acquiring Texaco in 2000, Chevron began selling off downstream assets in Asia, including refineries and its Caltex retail networks in Southeast Asia.
“This transaction reflects Chevron’s commitment to regularly review our portfolio and generate cash to support our long-term priorities. It is aligned with our previously announced asset sales commitment,” said , Michael Wirth, Chevron’s executive vice president for downstream and chemicals.
“We appreciate the strong performance of Caltex Australia over the many years we’ve been a shareholder, and look forward to a mutually beneficial supply and brand relationship for many years to come.”
In response, Caltex said it remains committed to its vision of remaining Australia’s leading fuels supplier.
“There will be no change to our ability to reliably and competitively deliver all our customers’ fuel requirements,” it said.
As part of its corporate re-alignment, Chevron also told Australian upstream firm Beach Energy Ltd that it will discontinue their efforts to explore for and develop shale reserves in central Australia.
With oil and gas prices expected to remain under pressure, the San Ramon, California-based firm earlier this month said it plans to divest US$15 billion worth of assets and slash spending on new projects through end-2017.
Despite the Caltex exit, Chevron said it is committed to its remaining downstream businesses in Asia.
“Asia-Pacific is a core strategic focus for Chevron’s downstream business and we remain focused on ensuring our operations, portfolio and investments are well-positioned to meet the region’s growing demand for energy,” said Mark Nelson, the company’s president overseeing its international downstream and chemical products.