Caltex’s 15-year fuel supply agreement with Woolworths’ will not come under any pressure from the supermarket giant’s plans to float or sell its petrol business, Caltex boss Julian Segal says.
“Those sites will be supplied by Caltex regardless of ownership for the next 15 years,” Mr Segal told Sky News Business yesterday.
“This is a very good outcome for Caltex.”
Last week, Woolworths announced it had extended its wholesale fuel supply agreement with Caltex but that it would continue to pursue an initial public offering or sale of the petrol station business.
It came two weeks after BP scrapped a proposal to buy Woolworths-branded petrol stations following indications regulators might oppose the proposed deal.
Speaking on Sky, Mr Segal emphasised that the deal included partnership components beyond fuel supply.
“We’ve been partners with Woolworths since 2004 and what we are seeing today is not just the extension for another 15 years but the expansion, which is truly about partnership,” he said.
Woolworths and Caltex are currently cementing plans to join forces in a food and fuel deal that will create a powerful national network of petrol stations in Australia, aggressively aimed at shoppers with the promise of cheap fuel and groceries.
It means the fuel supply agreement with Caltex will form the backbone to a broader joint venture that would see as many as 250 existing Caltex petrol stations transformed into Woolworths-branded “Metro” retail outlets.
On top of that, 125 Caltex sites will be added to Woolworths’ existing 638-site redemption network to create an organisation of 763 petrol stations where Woolworths loyalty card holders can redeem their 4 cent fuel discounts.
Caltex shares closed down 2.7 per cent yesterday, at $31.21, amid energy sector weakness.
Extracted from The Australian