Financial Times: Total signs Africa oil distribution deal: “Total is set to overtake Shell as the biggest oil distribution company in Africa after yesterday announcing plans to buy Exxon-Mobil's downstream assets in 14 African countries.”: Tuesday 6 Sept 2005
By Martin Arnold in Paris
Published: September 6 2005
Total is set to overtake Shell as the biggest oil distribution company in Africa after yesterday announcing plans to buy Exxon-Mobil's downstream assets in 14 African countries.
The French group said it had signed a sale and purchase agreement with its bigger US rival to buy more than 500 service stations, as well as 29 fuel or lubricant terminals and depots across the African continent.
François de Ligniville, Total's vice-president of finance for marketing in Africa, the Caribbean and the Middle East, said: "Before this deal we were neck-and-neck with Shell for distribution in Africa. Once this is approved we will overtake them."
He refused to disclose financial terms of the deal, which he said was subject to approval by regulators in each country.
The deal would increase Total's oil and lubricants distribution capacity in Africa by 1.2m tonnes, or 10 per cent. Its downstream network would expand to about 3,800 service stations, as well as interests in seven refineries.
Total is buying Exxon-Mobil's motor fuels, lubricants, aviation and maritime petroleum products in Chad, Djibouti, Ethiopia, Eritrea, Ghana, Guinea, Liberia, Malawi, Mauritius, Mozambique, Sierra Leone, Togo, Zambia and Zimbabwe. It already has operations in 12 of the 14 countries.
Mr Ligniville said Africa was an attractive marketfor oil distribution, as ithad grown 2.6 per centannually between 1996 and 2003, compared with stagnant or declining markets in Europe.
While record oil prices mean it is a difficult time for oil distributors, he said African oil consumption was "close to a bare minimum level", keeping it insulated from the impact of oil price inflation.
He also dismissed worries about the political stability of countries such as Zimbabwe, Ethiopia and Liberia. "We have spread the risk by expanding our presence to a maximum of countries to limit the impact of an incident in any one country."
*Separately, Total on Friday said it had sweetened its offer by 24 per cent for Deer Creek, the Canadian oil sands company, to fight off a rival bidder. It raised its friendly cash bid from C$25 to C$31-per-share.
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