MercoPress. South Atlantic News Agency

Argentine/Chinese corporation buys Exxon downstream assets in Mercosur

The deal includes 500 service stations and a refinery

Pan American Energy has agreed to buy an oil refinery and more than 700 service stations in Argentina, Paraguay and Uruguay from Exxon Mobil Corp for which it will be paying an estimated 850 million US dollars.

Pan American, which is owned by Bridas Corp -- itself co-owned by China's CNOOC and Argentina's Bulgheroni family -- will be buying 500 service stations in Argentina and another 220 in Uruguay and Paraguay. It will also acquire a refinery in the town of Campana, north of Buenos Aires that has the capacity to process about 90,000 barrels per day of crude oil.

Exxon Mobil expects to complete the sale in the second half of this year following regulatory approval according to a release from the corporation.

“The move will make Pan American an integrated company,” said Jorge Lapena, a former Argentine energy secretary, meaning it will both produce and refine oil in the Argentine market.

Pan American is the second-largest Argentine supplier of crude but does not yet own refining facilities. The Exxon unit is Esso Petrolera Argentina.

With this latest operation Pan American becomes Argentina’s second most important integrated oil group, with 13.7% of the fuels market and 17% of oil and natural gas production.
However Exxon Mobil will retain control of its upstream operations in the region, the statement said, referring to energy exploration and production.

The deal does not change the Argentine energy market's outlook for the moment, Lapena said, adding that rising fuel consumption has not been matched by an increase in output.

“There's a deficit in refining capacity and this deal doesn't address that issue,” he said.

In Uruguay Exxon has 110 service stations and the company under the name of Esso has been operating since 1930. According to numbers supplied by the Uruguayan branch, overall sales last year reached 2 billion US dollars having increased 6% over 2009.