Launching Texaco Hawaii
Steve’s breakdown: Chevron sold all it’s assists to a subsidiary of One Rock Capital. The gas stations included in the deal will be rebranded to Texaco but who will help get the word out in Hawaii.
HONOLULU, HI & NEW YORK, NY: Chevron USA Inc. announced Tuesday that it has reached an agreement with Island Energy Services to sell its assets in Hawaii.
The sale includes the 58,000 barrel-per-day refinery in Kapolei, interests in a network of 58 retail service stations, four product distribution terminals on Oahu, Maui, Kauai and Hawaii Island; pipeline systems and other related downstream assets statewide.
Financial terms of the transaction were not disclosed. The agreement is subject to customary regulatory approvals and is expected to be completed during the second half of the year.
The sale is aligned with Chevron’s asset sales program, which is targeting $5 billion-$10 billion in divestments through the end of 2017.
The service stations will be rebranded to Texaco and the gasoline will remain the same, with the Techron additive currently used by Chevron.
Island Energy Services was formed specifically for the purpose of buying out Chevron Hawaii. It’s part of a New York-based company called One Rock Capital Partners. The new company will be headquartered in Hawaii.
The new owners were meeting with current employees at the Chevron oil refinery in Kapolei and reached out for an on-camera interview, but got written statements instead.
“One Rock plans to build on the successful and solid foundation that Chevron has developed over the years and will work to create a stand-alone business, focused solely on Hawaii.”
There are currently 300 Chevron employees across Hawaii, and the company says all will be offered continued employment.
Customers will still be able to use their Chevron credit card, and the existing Safeway-Chevron loyalty program will transition to a Safeway-Texaco loyalty program.
There are no planned changes to the stations at this time. Those that have amenities such as a convenience store or car wash will continue as is, and stations under construction, like Hokulei Village on Kauai, will move forward as planned.
With Hawaii moving rapidly toward alternative fuels for transportation, KHON2 wanted to know, how do they plan to adapt?
“The company believes the refinery will continue to be an important part of Hawaii’s energy landscape, delivering mission-critical refined products to the islands’ utilities, airlines and motorists.”
Frank Young, former chairman of the Petroleum Advisory Council, says acquisitions like this happen all the time in the oil industry.
“Sometimes you acquire, and sometimes you divest of assets, depending on market,” he explained. “In this particular time, with oil prices slumping and Chevron’s profits are down, this may be a good time to divest of an asset that they have, because Hawaii’s asset is a huge asset… They own a 252-acre refinery.”
But what about the consumer? Young says this change could be positive: more competition in the market means cheaper prices.
Luis Salaveria, director of the state Department of Business, Economic Development, and Tourism, released the following statement in response:
“One Rock Capital Partners L.P. has informed the State of Hawaii of its signed agreement that allows its subsidiary Island Energy Services LLC to purchase Chevron U.S.A. Inc.’s Hawaii operations, which includes refining, distribution and retail assets.
The state looks forward to working with a company with long-term interests in Hawaii, and will work with the new owners to facilitate a smooth transition to protect consumers from any potential fuel disruptions.
The state will monitor the proposed sale to ensure price and supply stability in our local fuel market.”
This is not the first time a refinery in the state has been sold.
In 2013, Houston-based Par Petroleum paid $75 million in cash to buy Tesoro Hawaii.
The Kapolei refinery is now known as Hawaii Independent Energy, and the new owners also got rights to 31 Tesoro-branded gas stations in the state.
All employees were able to keep their jobs.