Mobil Oil Australia Ltd. has reached preliminary agreement to buy Esso Australia Ltd.'s downstream business unit for a reported $500 million (Australian).
Pending expected approval by Australia's Foreign Investment Review Board, the deal is to be complete by yearend.
The acquisition will cut the number of refiner/marketers in Australia to five, boosting Mobil to a tie for second in market share with BP Australia at about 21% each. Market leader Shell Australia Ltd. has about 25% of the market, with Caltex Australia Ltd. at 17% and Ampol Ltd. 16%.
WHAT'S INVOLVED
Involved in the purchase are Esso's 35% interests in the 98,600 b/d Altona refinery at Melbourne and the 46,500 b/d Port Stanvac refinery at Adelaide. Mobil currently holds the remaining 65% in each of the plants.
It also entails about 300 Esso service stations, 80 bulk fuel distribution businesses, five product terminals, and products tankers in addition to lesser assets.
The deal is the latest step by Mobil to expand its Australian operations. The company recently entered into several exploration joint ventures off Northwest Australia.
The deal marks Esso's exit from a downstream business that was struggling to hold onto market share.
The sale does not affect Esso's oil and gas exploration and production interests in the Bass Strait, Cooper/Eromanga basin, and Timor Sea, mining interests, or petrochemical joint venture with Mobil.
Separately, Esso Australia will consolidate its exploration and production interests in a new Melbourne office in 1992. It currently has headquarters in Sydney and an operations office in Sale, eastern Victoria, close to Bass Strait production.
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