OIL major BP is bringing in operating partners at local fuel terminals and regional business sales as it streamlines its Australian fuels unit and restructures its Melbourne office to focus primarily on growth in retail service stations.

BP’s Australian unit has signed a joint venture with Sydney-based services company UGL to manage operations, capital and maintenance across its Australian terminal network.

It has also struck a deal with private fuel company Lowes Petroleum to distribute BP fuel to business customers in Queensland, NSW and northeast Victoria, which with planned deals in Western Australia and Tasmania, will see BP hand over all its regional business distribution.

The deals will come with a reduction in numbers at the company’s Melbourne head office but the company would not provide more information on how the restructure would affect staff.

“By partnering with trusted, established regional distributors, BP believes we can compete better in a changing landscape and provide the responsive customer service our regional customers demand and deserve,” BP said.

Australia’s fuel refining and marketing sector, known as “downstream” in oil industry speak, has undergone rapid change in recent years as refineries close, fuel imports grow and aggressive new traders such as Vitol and Trafigura move in as majors like Shell and Chevron exit.

BP is now the last of the global oil majors involved in Australia’s retail fuel business after Shell sold its service stations to Dutch trader Vitol last year and Chevron sold out of its 50 per cent stake in Caltex Australia this year.

“These decisions are driven by the significant increase in competition over recent years in terminal competitors and tank capacity, and across the regional business from traditional and new players,” BP said.

In WA, BP said it intended to appoint Great Southern Fuels to operate its regional depot business in WA’s Wheatbelt region.

“These changes to our business go beyond restoring our competitive edge. We are reinventing our business to be more responsive to our customers and become the most preferred fuels brand in Australia and New Zealand”, BP Australasia president Andy Holmes said.

Earlier this month, The Australian revealed BP planned to spend more than $450m over the next three years to open as many as 60 new service stations.

Today’s deals, which hand over operatorship of distribution to others, shows the extent to which the company is focusing on its retail business.

“They align with our strategy of growth in our fuels business and increased brand presence in key markets across Australia and will enable us to concentrate our investment in our fuels business to enhance our customer offer,” Mr Holmes said.

“This will help to secure BP’s position, particularly given the rapidly changing downstream landscape in Australia and the challenging external environment.”

Extracted in full from The Australian.

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