Esso SAF, ExxonMobil's French affiliate, is in talks with Rhône Energies for the sale of the sale of its refining and logistics businesses in the south of France, including the Fos-sur-Mer refinery and the Toulouse and Villette de Vienne terminals.
Rhone Energies is a consortium of Entara LLC and Trafigura Pte Ltd.
The Esso Fos-Sur-Mer refinery was commissioned in 1965 and has undergone several reconfigurations during its history. The refinery has a crude oil processing capacity of 7 million metric tons per year, Esso said in a news release. Fos-sur-Mer benefits from direct access to a major port, competitive operating costs and the ability to process a wide range of crude oil feedstocks.
Under the terms of the proposed acquisition, Trafigura would enter into a minimum 10-year exclusive crude oil supply and product off-take agreement, including ownership of crude oil and product stocks. The agreement would ensure the refinery has a secure supply of on-demand feedstock at competitive costs and a reliable off-taker of refined products destined for the domestic market, Rhône Energies said in a separate statement.
The proposed acquisition is subject to a formal information and consultation procedure with employee representative bodies, Rhone Energies said. The transaction completion, expected by the end of the year, is subject to regulatory approvals. The financial details were not disclosed.
Rhône Energies said it plans to invest in the sustainability of the site to reduce its carbon intensity footprint while also investing in growth projects enabling further co-processing of biogenic feedstocks to produce renewable fuels.
Esso Chairman and CEO Charles Amyot said, “This divestment project demonstrates the know-how and skills of the teams operating the Fos refinery and associated depots. It is part of Esso's long-term strategy in France aimed at maintaining the competitiveness of its operations, while guaranteeing continuity of supply to its customers in the south of France. We are convinced that under the leadership of Rhône Energies and thanks to its support, the teams will continue to work tirelessly to supply the energy products needed on the market while continuing the site's commitment to the energy transition”.
Entara CEO Nicholas Myerson said, “We would be delighted to acquire and assume stewardship of the Esso’s Fos-sur-Mer refinery operations and look forward to engaging with the operational management, employee representatives and government stakeholders over the coming weeks and months to confirm our commitment to the operation and our plans for the future. We are committed to upholding the operation’s high standards of environmental responsibility, safety, and operational excellence”.
“The Fos-sur-Mer refinery is an efficient, flexible, well-run operation strategically located on France’s Mediterranean coast,” Ben Luckock, Global Head of Oil for Trafigura, said. “The refinery will continue to be an important contributor to energy security in the region and would benefit from Trafigura’s global trading and logistics network. Oil and petroleum products will continue to play an important role in supporting growing global energy demand during the transition currently underway to a low-carbon economy”.
Rhône Energies was formed by Entara and Trafigura to combine the strengths of a proven refinery operator with a global market leader in energy and commodities, it said. Entara will manage the Fos-sur-Mer asset, overseeing operations, maintenance, asset integrity, commercial, health, safety and environmental performance.
To contact the author, email rocky.teodoro@rigzone.com
What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.