From the Strait Times website (Wed)
BP to sell petrol stations in S'pore, Malaysia
It aims to focus on markets where it can be a leading player; divestment 'not a fire sale'; move will affect about 40 jobs
By Christopher Tan
BRITISH Petroleum (BP) is leaving the petrol station business in Singapore and Malaysia after 40 years - a move that industry players say reflects increasingly thin profit margins in the sector.
The company wants to sell 270 petrol stations - including 30 in Singapore - two liquefied petroleum gas bottling plants and its one-third stake in the Singapore Refinery Co as it pushes out of the two countries.
Advertisement
Its new goals are lofty. 'BP's global strategy is to focus on significant markets where we are or can be in No. 1 or No. 2 position,' said spokesman Mathew Yap.
BP has about the same number of kiosks in Singapore as Caltex, but less than half that of giants Shell and ExxonMobil.
Singapore Petroleum Co (SPC), the smallest player, has 10 kiosks.
Across the Causeway, BP has the fourth-largest kiosk network after Shell, ExxonMobil and Petronas.
The company is likely to use proceeds from the sale of its assets - estimated to be $1 billion - for growth areas such as China and Russia, where it has been increasing its presence.
But BP is keeping its trading, lubrication, marine, aviation, and gas and power activities here.
It said that the number of jobs affected would be limited to about 40, or less than 10 per cent of its total workforce here.
'In our talks with prospective buyers, the interests of staff, including job security, will be given serious consideration,' Mr Yap said.
The sale is likely to be made through an open-tender system.
The Straits Times understands that likely candidates include America's ChevronTexaco, which operates Caltex stations here, state-owned Kuwait Oil, Oman Oil and Indonesia's Pertamina.
Sources reckon Singapore's homegrown oil trader Hin Leong, owned by low-profile rags-to-riches magnate O.K. Lim, could also be in the running.
SPC could also be in the running, saying that it is 'keen to evaluate this network expansion opportunity'.
BP's network in Malaysia has interested US group Conoco, Malaysia's Petronas, and the Sime Darby group, according to wire agencies.
The divestment, said Mr Yap, is 'not a fire sale' as the businesses are profitable, and would be sold as going concerns.
But rivals seemed cool to the news.
'They don't have many good sites,' said one. 'These days, all the good sites are in HDB estates, and BP does not have many sites in HDB areas.'
They also pointed out that bidding would not be aggressive because of diminished profit margins in recent years, reflected by the low prices fetched at tenders for new station sites.
Last year, SPC secured a 2,256 sq m pump site in Hougang for $15.7 million.
The most recent tender, held last month, for a Sengkang site of similar size, was secured by Shell for $15.2 million.
The prices are about half those fetched at the peak - as recently as five years ago.
BP's move follows similar divestments in places like Hong Kong, Thailand and East Malaysia.
UP FOR SALE:
# 270 petrol stations, including 30 in Singapore
# Two liquefied petroleum gas bottling plants
# One-third stake in the Singapore Refinery Co
-------------------------------
Well...looks like time to cash in my EZ points and switch Petrol Stations
.....