Imperial Oil Ltd. will sell its remaining gas stations to five Canadian distributors for C$2.8 billion ($2.1 billion) as the oil producer focuses on its main oil-sands and refining businesses.
Imperial will sell 497 company-owned Esso retail stations to distributors including 7-Eleven Inc., according to a statement released on Tuesday. Other purchasers include Parkland Fuel Inc. and Alimentation Couche-Tard Inc., a Laval, Quebec-based convenience store operator.
“We believe these agreements represent the best way for Imperial to grow in the highly competitive Canadian fuels marketing business," Imperial Oil Chief Executive Officer Rich Kruger, said in the statement. "The Esso brand has a leading presence in Canada through our distributor network and strong prospects for continued growth to the benefit of our customers and shareholders."
Imperial Oil, whose majority owner is Exxon Mobil Corp., extracts bitumen and crude from its Canadian assets and operates three refineries in Canada. The company is curtailing investment amid weak prices for oil-sands bitumen that is reducing cash flow and production increases and spending cuts haven’t been enough to offset slumping commodity prices, according to Bloomberg Intelligence analyst Michael Kay.
It took Imperial more than a year to sell the stations after announcing that the remaining sites would be sold to independent third-party operators in January 2015. The Calgary-based company’s Esso retail stations were already operating under the branded wholesaler model, the company said Tuesday.