Business | Oil & Gas
ConocoPhillips exits fuel retail business
Conoco-Phillips will sell the remainder of its gas stations in the US, the company said on Wednesday, though Conoco, Phillips 66, and 76 will continue to operate under those familiar signs.
- AP
- Published: 23:44 August 28, 2008
New York: Conoco-Phillips will sell the remainder of its gas stations in the US, the company said on Wednesday, though Conoco, Phillips 66, and 76 will continue to operate under those familiar signs.
The 600 or so stations are being sold to Pacific Convenience and Fuel, a subsidiary of PetroSun Fuel.
The deal is "in the ballpark" of $800 million, said Sam Hirbod, chairman and chief executive of PetroSun and Pacific Convenience.
Part of the deal includes a long-term contract in which ConocoPhillips would provide fuel for the stations.
"If our brand is at that site, we will be supplying the gas," ConocoPhillips spokeswoman Terry Hunt said in a phone interview.
The purchase will help boost Pacific Convenience's presence in major West Coast urban areas, Hirbod said.
"We see opportunity in the future," he said in a phone interview. "As the oil companies exit, we think there will be more flexibility." ConocoPhillips began several years ago to spin off its retail stores, focusing more on exploration and refining, where much more money can be made.
It's not alone, as larger oil companies exit the retail gas sector due to shrinking profits as they struggle to pass on the higher energy costs to Americans eager to cut back on fuel expenses.
The biggest factor in the skyrocketing price of gasoline is the historic ascent of crude oil, which has surged from $45 per barrel in 2004 to around $120 this past week.
Major oil companies now own fewer than five per cent of gas stations, with the rest owned by smaller chains and independent operators.
But all gas station owners have played a delicate balancing game, hoping to maintain a price that allows them to afford the next shipment of gasoline but not give the competition an edge.
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