Asia, Middle East & Africa
Vivo hunts for more Africa deals after Engen purchase
Vivo Energy Plc is on the lookout for further African
stations from Gabon to Mozambique.
“There is fantastic growth and potential in
these countries,” Vivo Energy’s Chief Executive
Officer, Christian Chammas said this month.
The expansion plans of the London-based retailer,
ONGC looks to HPCL for retail expansion plans Thailand launches fuel
Iran in talks with Vitol Group over $1bn oil deal
acquisitions after adding more than 200 filling
which in May pulled off the city’s biggest new
listing this year, follows acquisitions by other fuel
providers in southern Africa as demand climbs.
Vivo is buying 225 fuel stations on the continent
from Engen Holdings Ltd. for $204 million in cash
and stock. The transaction has been revised since
the original 2017 agreement, with 75 outlets in the
Democratic Republic of Congo now dropped from
the deal following legal challenges, Chammas said
in an interview.
With the acquisition expected to close next
March, Chammas said Vivo is seeking further
purchases in South Africa and Nigeria to add to its
stable of more than 2,000 service stations across
23 African countries.
Vivo will pay $62.1 million in cash and issue
63.2 million shares to Engen under the revised
terms of the deal. It will gain Engen-branded filling
stations in Gabon, Kenya, Malawi, Mozambique,
Reunion, Rwanda, Tanzania, Zambia and Zimbabwe.
Engen will own about 5 percent of Vivo’s
shares, according to a statement.
Following this year’s $1 billion acquisition of
Chevron Corp.’s southern African assets by a
group backed by Glencore Plc, “there are remaining
opportunities” in South Africa, Chammas said.
Total SA and Sasol Ltd. have both expressed
interest in expanding their fuel-station networks in
the country, which has about 4,600 outlets.
“We will look at any other opportunity and
evaluate it,” Chammas said. Vitol owns 40 percent
of Vivo alongside 30 percent shareholder Helios
Investment Partners. They both have fuel-station
holdings in Nigeria -- another target for Vivo. In
2016, they bought a 60 percent stake in Oando
Plc’s downstream and retail business, which has
service stations and storage units in the country.
“One day, they may knock on our door and
ask us to take it over or buy it,” Chammas said.
“So we would, of course, look at that with a lot of
interest.” Vivo is also looking to expand its non-fuel
retail operations, such as convenience stores and
fast-food restaurants -- a business that grew 22
percent last year.
“It is changing the profile of the company to becoming
a very strong retailer, with ultimately about
75 percent of its business coming from retail,” up
from 60 percent now, Chammas said.
The impending merger of Indian state-run Hindustan
Petroleum Corp. Ltd (HPCL) and Mangalore
Refineries and Petrochemicals Ltd (MRPL) may
put a break on MRPL’s fuel retailing expansion
plans, leaving its parent Oil and Natural Gas Corp.
Ltd (ONGC) to fulfil these ambitions through HPCL,
said two officials aware of the development.
“MRPL is setting up retail outlets within its
span of influence and expects to overcome this
weakness in the medium term. Expected synergies
from the acquisition of HPCL, by the parent
company, ONGC are also expected to mitigate the
lack of retail penetration,” said MRPL in its annual
report for 2017-18.
MRPL entered the fuel retail segment in 2008
and till 2013 it had plans to roll out 120 fuel retail
outlets in the first phase of its retail expansion
strategy. The company has the approval to set
up 500 retail outlets and its parent ONGC has an
approval to set up 1,100 retail outlets.
Setting up a fuel retail outlet, including the cost
of the land required, requires around Rs5 crore.
MRPL has gone slow on its retail plans as, like
other oil marketing companies (OMCs), it was
declined subsidy (compensation for selling fuels
below market price).
“MRPL wanted to be a significant player in fuel
retailing, but being a standalone refinery, which is
not part of any oil marketing company, it does not
get compensated by the government for selling
fuel below market price.
The company fears that in the wake of higher oil
prices, the government may once again require the
OMCs to share the fuel subsidy burden. This will
render MRPL’s retail outlets uncompetitive,” said
the second official mentioned above.
Thailand’s Commerce Ministry has launched
“full-litre petrol” mobile apps to assure motorists
that the petrol stations where they fill up are
Commerce Vice-Minister Sakon Varanyuwatana,
said the apps will help buyers identify
3,700 verified petrol stations across the country,
as well as the locations of liquefied petroleum gas
and natural gas for vehicle (NGV) stations, convenience
stores, bank branches and ATMs.
“The new apps aim to accommodate the lifestyle
of the new generation that is fond of speed,
convenience and sophistication,” Mr Sakon said.
Mr Sakon said the Commerce Ministry’s Internal
Trade Department initiated the full-litre petrol station
programme in 2003 by encouraging both tank
farm operators and oil retailers to join the scheme,
which will see the Internal Trade Department
inspect the oil flow meters of the petrol stations
from time to time to ensure quality standards and
build up consumer confidence as well as prevent
any possible fraud.
Some 3,700 petrol stations from all brands are
participating in the programme nationwide.
Iran is seeking to extend or renew a $1 billion oil
deal with the Swiss Vitol Group ahead of the promised
return in November of crippling US sanctions,
The National Iranian Oil Company is now in
talks with Vitol to rescue their 2016 deal, in which
the trader agreed to pre-finance the equivalent
of $1 billion in exchange for future oil deliveries,
sources familiar with the matter told the Wall
The US publication cited another source in the
know who said the Swiss energy company was
likely to scrap the agreement. A spokeswoman
for the Group told the paper it complied with all
The US threat to go after foreign businesses
in Iran has been harshly criticised in Europe. The
European Union introduced a blocking statute
to shield EU companies from the impact of US
restrictions. Switzerland is not an EU member.