PITTSBURGH -- Gulf Oil Corp., a subsidiary of Chevron Corp., Tuesday announced the sale of a portion of its oil trading business to a newly formed company with ties to Saudi Arabia for an undisclosed price.
The Federal Trade Commission recently approved Chevron's $13.2 billion acquisition of Gulf -- the largest merger in U.S. history -- on the condition that Chevron find buyers for certain Gulf properties.
Gulf said it sold the principal business of Gulf Oil Trading Co., based in Houston, to GOTCO N.V. on Nov. 16. The new company was formed by the Hinduja Group of international trading and banking companies; ALEF Investment Corp., an affiliate of the Saudi European Group; and a group of Gulf Oil Trading's present employees.
F. Eberstadt and Co., which helped to put together the deal, will have an equity stake in the new venture.
GOTCO will purchase and sell crude oil, refined petroleum products, lubricating oils, chemicals and other products. The new company also will own Gulf's former interest in the China Gulf Oil Co., a partnership with the Chinese Petroleum Corp. in Taiwan.
Under the agreement GOTCO will have exclusive rights to market Gulf-branded automotive and industrial lubricating oils outside the United States, Canada and certain European countries.
Analysts said the Saudi participation in GOTCO is significant since the oil kingdom and other Middle East OPEC members are moving aggressively into marketing refined petroleum products in face of a shrinking demand for their crude oil.
The Hinduja group is directed by a prominent family from India, known as the House of Hinduja, which is involved in worldwide trade and investments in Australia, Asia, India, the Persian Gulf, Europe and the Americas. The group has been active on the international front for decades.
Gulf said the sale does not include other activities of its trading division involving oil trading for Gulf's worldwide production, refining and market operations and sales of marine fuels and lubricants.
Gulf will retain the unsold portion of the division as part of its newly organized trading and marine sales operation.
A Hinduja Group representative will be chairman of GOTCO and Herbert I. Goodman, who had been president of the division, will be president and chief executive officer of the new company.
GOTCO is completely independent of Gulf and Chevron, but will have the right to operate under the Gulf Oil Trading Co. name for one year. GOTCO will keep the headquarters in Houston and will take over Gulf Oil Trading offices in London, Tolyo, Singapore, Los Angeles, Bahrain, Taipei and Madrid.