The move comes just days after Vitol CEO, Ian Taylor, told fuel managers at the Prague IATA Fuel Forum that his company was negotiating to buy the aviation and broader downstream assets of Shell in 17 countries in the continent.
Trafigura-owned Puma Energy will buy BP’s fuel marketing businesses in Botswana, Namibia, and Zambia and BP’s 50% interest in each of BP Malawi and BP Tanzania, subject to the pre-emption rights of BP’s co-shareholders.
Delegates at the Prague Fuel Forum last week heard a full session of presentations on the rise of non-traditional suppliers in jet fuel markets.
Morgan Stanley Executive Director John Presti shared a stage with Vitol’s Toby Davies, who has been project managing that trading group’s launch of Vitol Aviation.
The new entrants are exploiting a European airport supply directive that gives them rights to enter refueling operations at EU airports across the region. The reduced appetite of oil majors to put cash into refining during a period of thinner margins, and much better returns for oil companies in the upstream, are also behind a move which sees companies like Shell, Chevron Texaco and Total slimming their refining and marketing, and in some cases their aviation operations.
Such conditions have enabled newly diverse supply arrangements at airports
such as Brussels and Stansted.
Puma Energy says the new units will add 188 fuel service stations, 11 fuel storage terminals, a range of mining key accounts, and an aviation fuel business with a presence at 22 airports.
The BP brand will be replaced by Puma Energy’s in the businesses, and Trafigura says 402 people will join its ranks.
Commenting on the acquisition, Puma Energy’s chairman, Pierre Eladari, said, “this positions Puma Energy as one of the largest independent downstream companies operating and investing in the region today.”
“Among the recent divestments by the majors in this region, we targeted the BP portfolio for the outstanding quality of its staff and assets, its key account customer base, and for the strategic fit with our existing businesses in Mozambique, the Democratic Republic of Congo and Angola.
“The deal will bring the trading group’s available fuel storage in the region to 450,000 cubic metres,” Eladari said.
At Prague, banks and traders said that their presence added robustness and competition to the marketplace, but some present were concerned that groups with a directional attitude to fuel trading were taking centre stage.
Another discussion point was fuel quality, with the chairman of the IATA Technical sessions pointedly questioning the new entrants’ ability to take over the research and development, and fuel quality assurance roles of traditional oil companies.
“No-one in their right mind would take shortcuts of aviation fuel quality,” a trading executive told OPIS in the aisles, “and obviously we’ll supply the fuel that contracts call for,” he added.
Gary Woodward of Shell, General Manager HSSE, Operations & Technical at Shell Aviation Ltd., said that while Shell was moving out of some markets, it was upping its presence in others and was certainly not handing over the reins to new downstream players.