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(Sharecast News) - American energy major Chevron is to sell all of its downstream operations across South East Asia and Australia to Eneos for a total of $2.2bn, as it continues to streamline its business.
The assets comprise Chevron's downstream fuels and lubricants marketing businesses in Singapore, Malaysia, the Philippines, Australia, Vietnam and Indonesia, including the US company's 50% stake in the Singapore Refining Company.
The deal, which is expected to close sometime next year, came in response to "changing market dynamics", according to a Chevron spokesperson.
It also marks Eneos's first move into refining outside of its domestic market. The company, which is a market leader in Japan with a 50% market share, said the deal comes as petroleum demand in the country continues to fall.
"This investment represents a significant step in strengthening the business platform that connects Japan with Southeast Asia and Oceania," said Tomohide Miyata, the chief executive of Eneos.
The Japanese outfit said it was part of a "portfolio restructuring" that aims to strengthen the business by pursuing growth opportunities in emerging markets and expanding the earnings base.
"While petroleum demand in Japan is expected to continue declining over the medium to long term, demand in Southeast Asia is expected to grow, supported by economic development in the region," Eneos said.
"Through this acquisition, the ENEOS Group aims to expand its fuel and lubricants supply and sales operations in the region and to increase earnings opportunities by enhancing its trading capabilities and acquiring overseas assets."
Eneos shares finished the Tokyo session down 2.7% at JPY1,315.50, while Chevron was down 0.1% at $185.75 in pre-market trading on Wall Street.
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