Number Of Petrol Stations In Europe Declining As Oil Companies Look To Exit Unprofitable Sites

Widespread economic uncertainty coupled with soaring oil prices has seen fuel consumption decline since 2008, leading international oil companies to review their service station portfolios across Europe and exit unprofitable sites, according to new analysis by global advisor CBRE.

CBRE’s new Petroleum Retail Sector report highlights that over the last decade oil companies have been going through a period of transformation both in their company structure and business priorities, which has resulted in a great amount of property changing hands, both upstream and downstream.

Since 2007, 4,573 service stations closed across Europe with household names including ExxonMobil, BP and Total optimising their portfolios across the continent. These companies followed Chevron and ConocoPhillips which sold their retail networks to independent petrol retailers.

In January 2012, OMV appointed Deutsche Bank to handle the structuring and implementation of its programme of refinery and service station divestments. The company has already announced a number of sales in Eastern Europe as it moves the portfolio away from refining and petrol retailing towards exploration and production.

Petrol retail portfolio consolidation is a trend that is evident across the globe. In 2009 Shell and Chevron announced they were reviewing their fuel business and activities in Africa. The same year Chevron announced and commenced the divestment of their petrol retail assets in eight African countries. In 2011 Shell also announced the sale of their retail portfolios in 21 of the 24 African countries in which they had marketing assets.

In Asia Pacific as recently as September 2012, Petronas – Malaysia’s national petroleum firm – announced it was selling all its 100 service stations in Thailand to Susco PLC – an international petrol retailer with 144 service stations.

The initiatives of oil companies to rationalise their portfolios have presented opportunities for independent petrol retailing companies, as well as supermarkets, to increase their site numbers. Currently 56% of all petrol stations across Europe have a retail provision.

Simon Galway, Executive Director, Global Corporate Services, CBRE, commented:

“The current economic conditions have led to corporates across all sectors to examine their real estate portfolios and seek ways to control costs. In the petroleum sector, we envisage that IOCs will continue to optimise their downstream real estate portfolios as they separate their retail and production activities. This will create opportunities for national oil companies who seek to acquire assets such as refineries and petrol filling stations. As international oil companies look to the east the national oil companies look to the west.”

There is a growing emphasis on the part of independent petrol retailers to increase profitability of sites they acquire by improving their convenience retail offer. Increasing the size of the shop or providing a branded retail offer is one way of achieving this in mature service station markets. Independent petrol retailers and grocers have proven to be the most successful in developing a profitable convenience store offer. Another trend to increase profitability and reduce operating costs is moving to an unmanned service station model. Since 2008, unmanned sites have increased across Europe by 447. At the beginning of 2011 there were 10,234, representing 7.7% of the market.

Click here to read MarketView
Click here to read MarketView