Caltex sells bitumen business

Oil importer and refiner, Caltex Australia (ASX: CTX) has agreed to sell its Sydney-based import bitumen business to Puma Energy, a subsidiary of commodity trading firm Trafigura Beheer.

Caltex managing director Julian Segal said in an announcement today, “Caltex’s strategy is to remain Australia’s leading transport fuels player. As bitumen is a by-product of refining, while we had an operating base oil refinery at Kurnell (Sydney), having the bitumen business made sense. Going forward, however, bitumen is no longer deemed to be a core business.” He added, “The decision to invest is consistent with our strategy and it makes operational and financial sense.”

Caltex says the deal is confidential, and hasn’t released the terms of the sale including the price.

Puma Energy is Australia’s largest independent petrol retailer, after purchasing Ausfuel for $625 million and appears to be interested in United Petroleum. United operates a chain of petrol stations across Australia, as well as fuel import terminals in several states and could sell for as much as $1 billion. United also sells bulk fuel products to other customers.

Currently Woolworths (ASX:WOW) and Wesfarmers (ASX:WES) owned Coles control around 50% of the petrol market with Caltex holding 17%. BP, 7-Eleven and the independents share the leftovers.

It seems Trafigura is positioning Puma Energy to be a major player in Australia’s petroleum marketing, distribution and sales, and building a portfolio of substantial petroleum assets. It may be a good move, with Australia forced to import the majority of its petroleum. Around 85% of input to refineries is sourced from imports according to the Bureau of Resources and Energy Economics (BREE).

The purchase of Caltex’s bitumen business also gives Puma exposure to the road construction industry and would benefit from an increase in Australia’s infrastructure spending, which appears to be on the cards.

Foolish takeaway

Caltex is moving out of the refining business to focus on its marketing and distribution of petroleum products. The sale of its bitumen business appears to be a win-win situation for both Caltex and Puma Energy.

Savvy investors are now seeking growth in smaller companies. Discover two stellar small-cap opportunities now, in our brand-new research report, “2 Small Cap Superstars” — simply click here to download your FREE copy.

More reading

Motley Fool writer/analyst Mike King owns shares in Woolworths.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!