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Seven energy firms, Jamaican investors show early interest in Petcom bid

Published:Friday | May 1, 2015 | 12:00 AM
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At least seven energy companies and other prospects have shown interest in Petroleum Company of Jamaica Limited, including Jamaican businesses that are considering group bids for the state-owned fuel distributor.

Petcom is a mid-size operator in a market of 17 marketing companies operating in Jamaica, with 24 service stations and 14 LPG filling plants.

Government's divestment agent, the Development Bank of Jamaica (DBJ), started advertising for bids for Petcom this week. Before that, during the prefeasibility phase of the divestment, interest in the asset was shown by Sol Simpson Oil of Barbados; Rubis Energy; and Cool Petroleum, which has been controlled by Kentucky-based Blue Equity LLC since 2011; Chilean company Puma Energy, a subsidiary of Trafigura Beheer; GB Energy; Total of France; along with several local consortia, said a well-placed energy source. With the exception of Puma Energy, all of the entities have operations in Jamaica, but it's unclear whether all will put in a bid.

Since 2010, Puma Energy has been building its fuel distribution business in the Caribbean and Latin America with the purchase of storage and fuel distribution from Caribbean Petroleum Corporation in Puerto Rico and Exxon Mobil throughout Central America.

In 2011, it bought Chevron's assets in Puerto Rico and the Virgin Islands, including 192 retail service stations, an aviation fuel supply business and storage tanks.

President of the Jamaica Gasolene Retailers Association, Leonard Green, said Monday that he is aware of more than one local group which has indicated interest in Petcom.

The DBJ itself had indicated in 2014 that it had received eight expressions of interest. Bids are due by June 30.

The bank said it would not comment publicly on the value of the asset. Current information on Petcom is available in an information memorandum that the DBJ says can be acquired for US$3,500 (around $404,000) but only after signing and submitting a confidentiality agreement.

A previous preliminary estimate of the value of Petcom has been put in the ballpark of $2 billion. The development bank formerly indicated that Petcom achieved sales of $10.99 billion in financial year 2012-13 and controls 12 per cent of the retail petroleum market,.

A recent report by parent company Petroleum Corporation of Jamaica covering the same financial period, said Petcom expanded its trading arrangements in the industrial business segment with several major clients, including MegaMart Limited, Port Authority of Jamaica, MJC Master Builders, Digicel Jamaica Limited and Truenfo Limited.

Most of the service stations in Petcom's network of 24 are said to be owned by individual dealers.