French integrated energy giant Total, the fourth largest oil company in the world, is bidding to purchase Esso’s Caribbean operations, including those in Jamaica.
Yesterday, Total´s managing director in Jamaica, Luke Mache, said that „this is a matter for head office in France. Local subsidiaries do not comment on acquisitions of this nature.” However, industry sources insisted that the French firm was looking to extend its presence in Jamaica after snapping up 18 of Roy D´Cambre´s National gas stations for $11 million in 2004. „It is difficult to see another player capable of outbidding Total for Esso´s Caribbean operations,” said a leading Jamaican pump retailer.
„As far as I understand, Total will be picking up some 200 gas stations in Puerto Rico, Jamaica, Haiti, the Eastern Caribbean and the Bahamas for $400 million. A player like Simpson Oil may partner with one of the larger operators and throw in a bid, but there is no doubt that Total is seeing something in the Caribbean that other operators are not.” A year after it acquired D´Cambre´s National Fuels, Total placed a bid for Shell´s Jamaican operations, losing out to Joey Issa´s Cool Oasis partnership with the Neal & Massy Group.
Esso, with 39 stations (of which it owns 31) currently has 23% of the local petroleum retail market. Petroleum industry analysts believe that if Total were to be successful in its bid for Esso, the French company would undoubtedly become the number two player in Jamaica. Over the last few years, Jamaica has seen some consolidation among gas station operators with Issa´s Cool Oasis Shell Group becoming the market leader with 80 stations in a deal concluded back in 2005 for approximately $200 million.
Total operates in 110 countries and last year posted revenues of €153.8 billion, which produced net income of €12.5 billion. Errol Edwards, president of the Jamaica Gasolene Retailers Association, said he did not know enough about the discussions between Total and Esso to give an informed comment. „I have heard that Esso has sold its Puerto Rico operations, but that´s about it,” said Edwards.
„What I will say is that we have a case before the Supreme Court involving Esso for breaches of the Weights and Measures Act passed in 2004. Marketing companies are holding on to the temperature adjustment rebates that are given to them by the refinery and not passing them on to the retailers. It would be great if this could be resolved before any possible sale is made.” (petrolplaza.com)