ExxonMobil's Singapore retail fuel stations to be acquired by Indonesia-based Chandra Asri
Chandra Asri Pacific will continue to operate the Singapore fuel stations under the Esso brand.
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SINGAPORE: ExxonMobil's network of Esso-branded retail fuel stations in Singapore will be acquired by Indonesia-based petrochemical producer Chandra Asri Pacific.
The company announced this on Friday (Oct 24), without disclosing the value of the deal.
Chandra Asri will acquire nearly 60 fuel stations in Singapore and associated supply agreements.
It said it will continue to operate the service stations under the Esso brand, purchase fuel from ExxonMobil, as well as maintain all existing customer loyalty points and cards.
"Chandra Asri Group will also take on all the relevant ExxonMobil staff running the business," it said in a media release.
"This strategic acquisition aligns with the company's long-term growth strategy, which focuses on developing integrated energy infrastructure for the energy and mobility solutions market in Singapore and Southeast Asia."
According to ExxonMobil Asia Pacific's chairman and managing director Geraldine Chin, the company expects business as usual during the transition period.
"The decision to move to a branded wholesale model aligns with how we market fuels around the world and reflects our ongoing efforts to strengthen our business portfolio," Ms Chin said.
"We anticipate business as usual during the transition period and will work with Chandra Asri to provide a smooth experience for our customers, including continued recognition of loyalty programme benefits."
CNA understands that service station staff at Esso are employed by FairPrice or its agents.
In response to queries on how the acquisition would affect its employees, ExxonMobil Asia said: "We expect that a few of our employees will transition to Chandra Asri as part of the transaction."
The sale does not impact ExxonMobil’s integrated manufacturing site in Singapore, which continues to provide fuels to commercial customers in the region and globally.
The announcement confirms a Reuters report in April that ExxonMobil was in talks to sell its assets as the US energy firm was seeking to exit Singapore's retail fuel market.
ExxonMobil said earlier this month that it expected to cut the number of its employees in Singapore by 10 per cent to 15 per cent, citing a need to improve competitiveness in an "ever-evolving landscape" and to "position the business for future success".
Although the company declined to say how many workers would be laid off, ExxonMobil had about 3,500 employees in Singapore, so the expected cuts could affect up to 500 employees.
The announcement came a day after it unveiled a global restructuring plan, which will see the company laying off 2,000 jobs worldwide, or 3 to 4 per cent of its workforce.
Chandra Asri was established in 1992, with assets in Indonesia and Singapore.
Earlier this year, a Chandra Asri joint venture with Swiss trading giant Glencore completed the acquisition of Shell's Singapore refinery and refining assets on Pulau Bukom and Jurong Island.
The deal makes Indonesia-based Chandra Asri, the majority owner of the joint venture, one of Southeast Asia's largest petrochemicals players.
In response to CNA's questions about whether there are plans to expand the Esso network in Singapore, Chandra Asri said it is not able to provide other details at this stage as the transaction is under regulatory approval.
On how the acquisition aligns with Singapore's move away from internal combustion engine vehicles, a Chandra Asri Group spokesperson said: "EV adoption is accelerating in Singapore and will continue to shape the market. While EV demand will increase, we project a managed transition period where petrol vehicles will remain in use.
"Chandra Asri Group is committed to enabling a low-carbon future, and we will continue to invest in Aster’s presence in Singapore towards renewable power solutions and innovation for green growth opportunities."
Aster is jointly owned by Chandra Asri and Glencore.
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