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San Miguel to buy Exxon stake in Malaysia's Esso-sources

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San Miguel to buy Exxon stake in Malaysia's Esso-sources Empty San Miguel to buy Exxon stake in Malaysia's Esso-sources

Post by hlk Wed 17 Aug 2011, 18:26

KUALA LUMPUR/MANILA: Philippine conglomerate San Miguel , which is aggressively expanding into infrastructure, will buy ExxonMobil's 65 percent stake in Malaysian oil refiner Esso , two sources with direct knowledge of the deal told Reuters.

The value of the deal was not immediately available. Esso's market cap on Wednesday, Aug 17 was about 1.17 billion ringgit ($392.55 million), and Exxon's 65 percent stake valued at about 760 million ringgit.

The Philippine company has diversified its portfolio in recent years, spinning off its traditional brewing business and moving into areas such as domestic power, telecommunications, infrastructure, and energy.

At the same time, ExxonMobil has been actively reviewing its Asian assets and earlier this month agreed to sell its stake in three companies associated with the Indonesian gas and liquefied natural gas business.

Reuters also reported earlier this year that Thai Oil was looking at buying ExxonMobil's Esso in Thailand.

Officials with Esso and San Miguel could not be immediately reached for comment.

Esso's operations in Malaysia include a refinery located in Port Dickson on the west coast and a chain of 560 retail stations across the country.

Built in the 1960s at an initial cost of 50 million ringgit, the Port Dickson refinery has a processing capacity of 88,000 barrels of crude per day (bpd), but it averaged 45,000bpd in 2010, according to the company's 2010 annual report.

"San Miguel won the bid because it was the highest bidder and was willing to invest in Esso's refinery to bring it up to speed," one of the sources told Reuters.

He said that the investment by San Miguel will allow the Port Dickson refinery to process other types of products from the refinery.

The refinery presently produces a range of products including gasoline, diesel, liquefied petroleum gas (LPG), jet fuel, kerosene and low-sulfur waxy residue.

Cash-rich San Miguel said on Tuesday it had received proceeds worth 13 billion pesos ($306.7 million) from a share purchase deal covering a portion of its stake in Manila Electric Co . It sold the unit to its food arm, San Miguel Pure Foods , giving the parent fresh funds for new acquisitions.

San Miguel owns a majority share of the Philippines' largest oil refiner, Petron Corp , and the Esso purchase will widen the group's exposure in the oil refinery and distribution business.

In Malaysia, shares of Esso fell 0.2 percent on Wednesday at the close of the morning trading session to 4.33 ringgit
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