Yesterday’s news that Shell and BP are in the process of exiting the Australian petroleum market is a great example of low returns seeing multinationals exit businesses and redeploying capital elsewhere in this globalised world.
But the fact that we already know that a Macquarie Bank consortium is interested in Shell’s assets and today see reports in the Sydney Morning Herald that private equity firm TPG is in detailed discussions with Shell just shows that one company’s low performing asset is another firms opportunity.
The SMH reports that these two bidders might be joined by an Asian energy firm such as Thailand’s PTT or Chinese investors who have shown interest in Shell’s Geelong refinery in the past.
The big driver it seems for the shake up at the moment is that the Australian market is turning from one where exploration and then distribution is the basis of the model, to a marketing-based model.
“Chips and chocolate” are the key drivers according to Nic Moulis, chief executive of the Australian Convenience and Petroleum Marketers Association.
He also told the SMH that: “Now Australia is a net importer of fuel we are very attractive from the point of view of regional and international investment in the Australian market for those companies, unlike BP and Shell, which are really upstream companies rather than downstream marketers.”
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