Chevron seeks buyers for 50% stake in Singapore refiner SRC, sources say

US oil giant Chevron is actively seeking non-binding bids for its 50 percent stake in the Singapore Refining Company (SRC), including interest from its joint venture partner, PetroChina, according to eight sources familiar with the situation, as reported by Reuters.

Source: StraitsTimes

Additional Asset Sales in Asia

Chevron is also assessing potential sales of other assets in Asia, which include terminal and fuel storage facilities located in Australia and the Philippines, as indicated by one of the sources and another separate source.

These potential divestitures come as Chevron undergoes a global restructuring aimed at streamlining operations and cutting costs, a process that may result in layoffs of up to 20 percent of its workforce by the end of 2026.

Chevron has enlisted Morgan Stanley to assist in exploring the sale of the SRC refinery in Singapore, along with other assets in Asia, one source revealed. Morgan Stanley, however, declined to comment on the matter.

PetroChina’s Right of Refusal

PetroChina, which holds the other 50 percent of SRC through its Singapore Petroleum Co Ltd unit, has the first right of refusal to acquire Chevron’s share, according to three of the sources. PetroChina did not respond to requests for comment.

Potential Buyers

Other firms that have been invited to evaluate the refinery stake include the global trading house Glencore, as stated by three sources. A spokesperson for Glencore mentioned that the company does not comment on market rumors or speculation.

Buyers were asked to submit non-binding offers in July, according to the three sources.

Valuation and Capacity

One source estimated the value of Chevron’s stake in the Singapore refining business to be in the hundreds of millions of dollars. Two industry experts, who are not involved in the process, provided estimated valuations for 50 percent of the plant, ranging between US$300 million (S$385 million) and US$500 million.

The SRC refinery has a crude processing capacity of approximately 290,000 barrels per day, making it the smallest refinery in Singapore. The facility includes seven shipping berths, all capable of accommodating very large crude carriers, according to SRC’s website.

In May, Chevron divested its stake in Chevron Phillips Singapore Chemicals to Aster Chemicals and Energy, a joint venture between Chandra Asri and Glencore.

A deal for the refinery would mark another recent exit by a major global player from the Singapore refining sector, which is currently facing a carbon tax that has increased operating costs.