MOBIL TO SELL AUSSIE PETROCHEMICAL ASSETS

Mobil Oil Australia plans to withdraw from Australian petrochemicals in a proposed $1 billion (Australian) shakeup and merger of that sector of the industry. Moves are under way for Mobil to sell its 50% interest in three petrochemical businesses that form part of the Altona Chemical Complex on the outskirts of Melbourne. The three are Altona Petrochemical Co., Commercial Polymers, and Australian Synthetic Rubber Co. A unit of Exxon Corp. holds the other 50% interest in all three.

Sept. 30, 1991

2 min read

Mobil Oil Australia plans to withdraw from Australian petrochemicals in a proposed $1 billion (Australian) shakeup and merger of that sector of the industry.

Moves are under way for Mobil to sell its 50% interest in three petrochemical businesses that form part of the Altona Chemical Complex on the outskirts of Melbourne.

The three are Altona Petrochemical Co., Commercial Polymers, and Australian Synthetic Rubber Co.

A unit of Exxon Corp. holds the other 50% interest in all three.

The move marks the final breakup of the old Standard Oil-Vacuum Oil alliance in Australia and follows Mobil's purchase of all of Esso's Australian retail service station chain and refinery assets earlier this year.

WHAT'S PLANNED

Mobil's sale proposal, unveiled last week, is designed to produce a single petrochemicals group at Altona, which will have a better chance of competing on the international market.

Although still in discussion stage, the proposal involves a complex reshuffling of assets that will see the four major petrochemical operations at Altona operating in a joint venture of Exxon Chemical and Hoechst Australia, part of the German chemicals group.

Exxon, Hoechst, and Mobil have signed letters of intent to consider the deal. A decision on whether to proceed is scheduled before the beginning of next year.

Altona Petrochemical is the main business in the complex.

It uses feedstock from the nearby Altona refinery, now 100% owned by Mobil, to produce ethylene, propylene, and butadiene.

Commercial Polymers produces polyethylene resins, while Australian Synthetic Rubber produces raw material for tires.

Hoechst, which runs its own business in the complex produces high density polyethylene and polypropylene.

The plan is for Hoechst to buy out Mobil from its existing joint ventures with Exxon. Then the new Exxon-Hoechst joint venture will purchase the current Hoechst business.

The new entity is projected to have assets of about $1 billion (Australian) with sales of $500 million (Australian)/year, and 1,300 employees.

Mobil Australia Chairman Dick Leonard said the proposed sale of petrochemical assets followed the company's decision to concentrate on other activities in the country.

The focus is to be on exploration, production, and refining/marketing.