Statoil paves way for IPO of filling stations

The group said it had applied to the Oslo Stock Exchange for the admission of a new company, Statoil Fuel & Retail, paving the way for an initial public offering in the fourth quarter of this year. Analysts said the business could be valued at more than NKr10bn ($1.6bn). The fuel and retail business made operating profits of NKr1.5bn in 2009.

The spin-off would underline the shift by oil and gas producers away from roadside retail operations, typically among the lowest margin parts of their business.

In the past decade, Conoco­Phillips has shed 55.4 per cent of its retail sites, ExxonMobil 38.5 per cent and Royal Dutch Shell 29.8 per cent. BP has sold all its US filling stations since 2007 and Chevron launched a restructuring of its retail operations earlier this year.

The Statoil business includes 2,300 filling stations in eight countries across Scandinavia, the Baltic states, Poland and Russia. It also includes a unit that sells lubricants and aviation and marine fuels. Statoil on Thursday said it would hold on to at least half of the company after the IPO, which would go ahead in the fourth quarter, subject to market conditions.

The group, two-thirds owned by the Norwegian government, announced the spin-off plan last February.

Analysts welcomed the move at the time, saying it was hard for Statoil to justify investment in a business with a much lower return on investment than its core production operations. The group is increasingly focused on exploration in the Americas, Africa and the Middle East to offset the decline in its mature North Sea reserves.

While representing just a small fraction of Statoil’s revenues, the retail business would be among the larger companies listed on the Oslo bourse. Statoil holds the number one or two positions in most of the retail markets in which it operates.

“In the future, we believe that this unit’s growth and further development will be best achieved as an independent company with direct access to the capital markets,” said Helge Lund, Statoil chief executive, in February.

The group will keep control of its refinery business, which supplies the retail operation.