One of the world’s most controversial and secretive companies will become a major fuel retailer in Australia after a deal was struck over the weekend.
According to a report in the Financial Times, commodity trading firm Trafigura has spent more than $800 million to become the largest independent fuel retailer in Australia. The FT said Trafigura — a Dutch company set up in 1993 and now ranks third behind Vitol and Glencore among the world’s biggest oil and commodity traders — bought into Australia through its 80% controlled Puma Energy arm, which acquired the Ausfuel group from the Archer Capital private equity group for around $US650 million in cash at the weekend. That was after it paid a reported $US200 million to buy Neumann Petroleum.
The move reflects the opportunities for oil importers created by the steady fall in Australian refinery capacity. “Oil traders and executives believe Australia could soon overtake Indonesia as the biggest importer of refined oil products in the Asia-Pacific region because of the closure of old and high-cost refineries in the country and rising demand,” the FT reported.
Shell closed its Clyde refinery in Sydney and is going to a full import mode for the NSW market (it still has a refinery in Victoria). Caltex has followed suit for its larger but elderly Kurnell refinery in Sydney. Caltex has the Lytton refinery in Brisbane that was owned by Ampol, which Caltex took over years ago. Caltex is about to bring back the Ampol name as the operating subsidiary to handle all its imports of oil products such as petrol, diesel and jet fuels.
The closures have cut Australia’s refining capacity by a third, allowing the aggressive Trafigura to enter the market — not as a refiner but as an importer and retailer, in direct competition with Caltex, Shell, BP, Exxon Mobil (in a few areas) and the joint ventures between Coles and Shell and Caltex and Woolworths and various small chains of independents.
According to its (very outdated) website: “Neumann Petroleum owns and operates a customs bonded, bulk seaboard fuel terminal, located at Eagle Farm, Brisbane which was purchased from Fletcher Challenge in 2001.” Ausfuel styles itself as Australia’s largest independent fuel group and has operations in every state, carrying brands like Ausfuel Gull, Gull, Choice Petroleum, Peak and Directhaul. It claims to sell over a billion litres of fuel a year.
According to the FT, Australia’s fuel consumption — about 1 million barrels a day of oil-refined products — is “on a par with a medium-sized European country such as the Netherlands … Analysts believe that by 2015 Australia could be importing about 650,000 b/d of oil products.” This represents a huge and rare opportunity for fuel importers.
The purchase of Ausfuel will add 110 retail sites and 11 depots to Puma Energy’s existing Australian portfolio, on top of acquisition of Neumann’s 120 petrol stations and one import terminal. The acquisitions are beefing up the business of Puma, 80% owned by Trafigura, ahead of a potential initial public offering in London (the remaining 20% was sold to Sonangol, the state-owned oil company of Angola, two years ago, making it an unlikely indirect investor in Australia).
Trafigura has a poor record on environmental, health and transparency issues. In the most notorious case, it tried to use a superinjunction to prevent newspapers reporting House of Commons proceedings that would have revealed a report exposing the company’s role in a huge toxic waste spill in Ivory Coast. The attempt collapsed after a Twitter campaign and the publication by WikiLeaks of the report. Trafigura paid tens of millions of pounds in compensation to victims.
Trafigura has also been fined for exporting toxic waste to Africa and breaching the Iraqi oil embargo.
A report last year found toxic waste dumping by Trafigura was still a serious threat in underdeveloped countries, with NGOs calling for an investigation of the company.
Just like a real, trooly dooly banana repub..err..monarch ridden, 3rd world country, plenty of our own resources but an ever diminishing capacity to “significantly transform” (ABS speek) raw materials. Unlike the mighty industrial power of Singapore on whom we rely for TAPIS petrol pricing.