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Australia: “The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth,” said Mark Nelson, Chevron’s Executive Vice President for Downstream & Chemicals. “It will build on Chevron’s strong history of partnership in Australia and our global experience in fuels and convenience marketing and supply.”
Chevron Australia Downstream Pty Ltd, a wholly-owned subsidiary of Chevron Corporation, has announced that it has signed a conditional Share Sale Agreement with Puma Energy Asia Pacific B.V. to acquire all shares and equity interests of Puma Energy (Australia) Holdings Pty Ltd for the amount of AU$425 million.
Puma Energy (Australia) Holdings Pty Ltd and its subsidiaries hold assets including a network of company-owned and retailer-owned service stations in Australia, a commercial and industrial fuels business, owned or leased seaboard import terminals and fuel distribution depots.
“The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth,” said Mark Nelson, Chevron’s Executive Vice President for Downstream & Chemicals. “It will build on Chevron’s strong history of partnership in Australia and our global experience in fuels and convenience marketing and supply.”
The acquisition of Puma Energy (Australia) Holdings Pty Ltd is expected to close in mid-2020, subject to regulatory approvals and the satisfaction of customary closing conditions.
The oil mining giant also announced a 2020 organic capital and exploratory spending program of $20 billion in December 2019. The 2020 budget supports a robust portfolio of upstream and downstream investments, highlighted by Chevron’s world-class Permian Basin position, the company’s major capital project at TCO in Kazakhstan, and an advantaged queue of deepwater opportunities in the Gulf of Mexico.
“We are positioning Chevron to win in any environment by ratably investing in the highest return, lowest risk projects in our portfolio. This will be the third consecutive year with organic capital spending held flat at $20 billion, continuing our capital discipline through the cycle. Our emphasis on short cycle investments is expected to deliver improved returns on capital and stronger free cash flow over the long-term,” said Chevron Chairman and CEO Michael Wirth.
As a result of Chevron’s disciplined approach to capital allocation and a downward revision in its longer-term commodity price outlook, the company will reduce funding to various gas-related opportunities including Appalachia shale, Kitimat LNG, and other international projects. Chevron is evaluating its strategic alternatives for these assets, including divestment. In addition, the revised oil price outlook resulted in an impairment at Big Foot. Combined, these actions are estimated to result in non-cash, after tax impairment charges of $10 billion to $11 billion in its fourth quarter 2019 results, more than half related to the Appalachia shale.
“We believe the best use of our capital is investing in our most advantaged assets,” Wirth continued. “With capital discipline and a conservative outlook comes the responsibility to make the tough choices necessary to deliver higher cash returns to our shareholders over the long term.”
Chevron Corporation is one of the world’s leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power; and develops and deploys technologies that enhance business value in every aspect of the company’s operations. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.