Trafigura-led consortium in exclusive talks to acquire Exxon Mobil’s Fos-sur-Mer refinery in France

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In a strategic move, Rhone Energies, a consortium formed by commodity trader Trafigura and Entara LLC, has entered into exclusive negotiations with Exxon Mobil’s ESSO SAF to acquire the Fos-sur-Mer refinery in southern France, along with the Toulouse and Villette de Vienne terminals.

Trafigura’s statement on Thursday highlighted a significant aspect of the deal: a minimum 10-year exclusive crude oil supply and product offtake agreement. This agreement includes ownership of crude oil and product stocks in tank, solidifying Rhone Energies’ position in the region.

The Fos-sur-Mer refinery boasts a crude oil processing capacity of 140,000 barrels per day, making it a key asset in the energy landscape. Despite the acquisition, Rhone Energies remains committed to supplying ESSO SAF in the region, ensuring a seamless transition and continuity of operations.

The completion of this deal is contingent upon regulatory approvals and is anticipated to be finalized by the end of 2024. Financial terms of the proposed transaction remain confidential at this time.

This acquisition marks the second major move by Trafigura this year, following their recent agreement to purchase the European business of Greenergy, a UK-based supplier of road fuels and a biodiesel producer. This strategic expansion underscores Trafigura’s commitment to growth and diversification in the energy sector.

Trafigura’s bold acquisitions come at a time when trading firms are actively seeking opportunities globally, driven by the European energy crisis and market volatility resulting from western sanctions on Russia. Trafigura’s net profit for last year reached a record $7.4 billion, a 5% increase from 2022, reflecting the company’s strong performance amidst challenging market conditions.

The announcement has already had a positive impact on ESSO’s shares, which surged by 9.2% on Thursday, reaching their highest level since July 2008. This demonstrates investor confidence in the strategic direction and growth prospects of both Rhone Energies and ESSO SAF.

(Source: Reuters | Tradewinds)

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