Caltex to acquire Thai British Petroleum Oil

Caltex to acquire Thai British Petroleum Oil

BANGKOK (AFP): Caltex Oil (Thailand) Ltd. said yesterday it will acquire the entire retail service station network of British Petroleum Oil (Thailand) Ltd., despite a serious recession and a slump in oil sales.

Caltex has signed an agreement to take over 48 BP service stations, bringing the number of its outlets in the country to more than 600, company executives said.

They said they could not divulge the value of the deal due to a confidentiality agreement.

Caltex Thailand managing director Richard Abrams admitted the company was taking a "big gamble" amid a "deep and broad problems" facing the economy, but he remained confident of a long-term recovery.

Sales of fuel at Caltex service stations in the third quarter were down four-to-five percent on the previous quarter, while profit margins were down by up to 50 percent due to the July 2 float of the Thai baht currency, he said.

"With the recent downturn in the economy and the changing times, Caltex has adopted an aggressive strategy for Thailand," Abrams said.

"This acquisition provides an excellent opportunity to accelerate our growth plans ... (It) demonstrates the financial strength of Caltex and a strong commitment to investing in Thailand," he said.

Caltex said in a statement the acquisition was above and beyond expansion plans worth 200 million dollars announced earlier this year.

The BP stations -- all of which will be converted to the Caltex name by the middle of next year -- will increase Caltex's market share by one percent nationwide, and by two percent in Bangkok, it said.

Abrams said this would take the company's overall retail market share to 13.5 percent nationwide, and to 16 percent in Bangkok.