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Bangkok Post: Shell and Petronas vie for Jet stations as Conoco pulls out

SOONRUTH BUNYAMANEE

Shell and Petronas are interested in acquiring the Jet petrol stations operated by Conoco (Thailand) Co.

The US-based oil company has decided to withdraw from Thailand after failing to break even after 15 years.

The firm has quietly approached several oil companies operating locally, including PTT Plc, about selling its 147 petrol stations nationwide. Industry executives now believe Conoco will call for public bids for the Thai operations in the near future.

“We’re interested in participating in the bids once Conoco begins the process,” said Tiraphot Vajrabhaya, the chairman of Shell Company of Thailand.

He said the multinational was always exploring opportunities to expand, particularly in Asia Pacific, under its “move from West to East” strategy.

“However, the final decision of Shell (regarding Conoco) will depend on conditions, the market situation, potential and pricing,” he said.

Conoco is estimated to have invested more than four billion baht in its Thai operations but Mr Tiraphot said the price of any acquisition was likely to be lower once depreciation and current market value were taken into account.

For one thing, he said, the current climate of the retail oil business in Thailand was very poor. “With minimal margins for retail oil trading, we will definitely not expand the business this year.”

He expected the bidding process, if it went ahead, to last for six to 12 months.

Mr Tiraphot said Shell would invest 200 million baht for general maintenance of its stations to sustain businesses for this year, substantially lower than its normal investment of 700-800 million baht a year.

Shell has been closing around 10 poorly performing stations per year and now has 580 sites, a figure it expects will decline to around 500 over time.

A Petronas executive confirmed that the Malaysian company planned to bid for the Jet stations to strengthen its presence in Thailand.

However, Mohd Aidnil Abdul Razak, chief executive of Petronas Retail (Thailand) Co Ltd, said the company would not expand its network this year beyond the 117 stations it now has.

“We are always seeking opportunities to expand business, but if Conoco formally opens bidding, I will have to convey the message to my headquarters in Kuala Lumpur and the decision will be made there,” he said.

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