The seemingly rash sell-off of company owned retail gasoline stations that I previously reported here continues. While the previous article I featured focused on ExxonMobil with a nod to the other major oil companies, the article I am featuring below focuses on ConocoPhillips; the parent corporation of the popular “Union 76” branded retail stations here in the greater Los Angeles area.
I find it interesting that this article and many other articles on the subject to not mention what portion, if any of the environmental liability the parent company, in this case ConocoPhillips, will retain after the sale is performed.Â Particularly here in the greater Los Angeles area, the environmental liability at many of these stations can be a significant factor in the transaction.
ConocoPhillips will sell its company-owned filling stations
By BRETT CLANTON Houston Chronicle Copyright 2008
Aug. 27, 2008, 12:47PM
ConocoPhillips will sell its 600 remaining U.S. gas stations under a $800 million deal announced today that is the latest example of a major oil company exiting the troubled retail fuel station business.
PetroSun Fuel, a privately held Seattle firm, has agreed to buy the properties through a newly formed affiliate called Pacific Convenience & Fuel LLC.
The deal will make PetroSun, now with roughly 120 properties on the West Coast, one of the nation’s largest independent petroleum and convenience store operators.
Included in the transaction are company-owned and company-operated stores under the ConocoPhillips, Phillips 66 and 76 brands. Those brands will not disappear, but will have a more distant relationship with their former parent.
Once the deal is closed, ConocoPhillips will act solely as a wholesale fuel supplier to the sites, as well as to independently owned stores that are not part of the deal, said Terry Hunt, a spokeswoman for the Houston-based oil company.
She called the arrangement a “more sustainable business model.”
The deal comes as retail gas stations are struggling to turn a profit amid higher fuel costs and rising credit card fees. It also arrives as other oil majors including Exxon Mobil and BP are unloading U.S. stores.
Sam Hirbod, CEO of PetroSun, said in an interview that his company sees opportunity in all the churning.
“We are very much interested in participating in the consolidation that’s happening in the retail gas station sector,” he said, adding that his company is working on two other deals that could add up to 200 more stores by next year.
At the ConocoPhillips stores, PetroSun aims to offset rising costs by upgrading properties with better in-store products and services. That includes the addition of fresh deli sandwiches and salads, healthier snacks and even financial services, Hirbod said.
Most 600 stores incuded in the deal are in urban areas on the West Coast, with others in Denver, Col; Alberquerque, N.M. and Salt Lake City, he said. A Dallas store is the only Texas site.
In Houston, ConocoPhillips sells fuel through Phillips 66 and Conoco brand stations, but none of those is affected by the deal.
ConocoPhillips, the nation’s third-largest oil company and second-largest refiner, announced in December 2006 it would sell its remaining gas stations.
The announcement today ends that effort.
“This transaction is designed to strengthen our branded wholesale business model and grow market share,” Clayton Reasor, president of ConocoPhillips’ U.S. marketing division, said in a statement today. “We have worked with PetroSun before and believe that they will continue to enhance our brands and provide excellent service to our retail customers.”