French oil company Total SA (TOT, FP.FR) Wednesday confirmed it acquired Royal Dutch Shell PLC's (RDSB.LN) fuel retail network in Egypt as part of its strategy to strengthen its distribution position in the country and wider region.
French oil company Total SA (TOT, FP.FR) Wednesday confirmed it acquired
Royal Dutch Shell PLC's (RDSB.LN) fuel retail network in Egypt as part of its
strategy to strengthen its distribution position in the country and wider
region.
"Through this acquisition, we reaffirm our ambition to pursue our
development in
Africa
and in the
Middle
East
in the retail business," a spokesman for Total said. Asked about
the price of the transaction, he declined to disclose any detail.
Total already owns 70 fuel stations in
Egypt
,
representing a 4% market share, and will acquire 85 more from Shell to become
Egypt
's
fourth-largest gasoline retailer, doubling its market share, the company said.
The French company is strengthening its position as the largest gasoline
retailer in
Africa
, the spokesman added.
Gasoline retail activities have decreased in
Western
Europe
, on the back of lower consumption due to the prolonged economic crisis.
Lower-cost retailers have also emerged, forcing some major companies to rethink
their refining and marketing strategy and focus instead on oil exploration and
production.
Prospects in the retail sector are brighter in emerging markets, where demand
for gasoline and transport fuels is growing faster.
"The sale is consistent with Shell's strategy to concentrate its
downstream footprint on a smaller number of assets and markets," Shell
said in a statement. It cited the recent sale of some refineries in the
U.K.
and
Germany
and
its refining and marketing businesses in
Finland
and
Sweden
as
examples of this.
Total, which has engaged in a massive exploration effort to find new oil and
gas reserves, has nevertheless reaffirmed the importance of downstream
activities within its business model, even though it has idled some refineries
in
Europe
.
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