November 15, 2010 / 8:46 AM / in 8 years

UPDATE 3-BP sells Southern Africa fuel retail units

* Assets include forecourts and storage in five countries

* Trafigura subsidiary Puma buys units in $296 mln deal

* Puma eyes further downstream expansion in Africa, Asia

(Adds Trafigura appealing court decision)

By Tom Bergin and Emma Farge

LONDON, Nov 15 (Reuters) - London-based BP (BP.L) said it had agreed to sell its Southern African forecourt network to international commodities trader Trafigura for $296 million, echoing a trend of big oil companies exiting fuel retail.

BP said it will sell interests in forecourts and supply businesses in Namibia, Botswana, Zambia, Tanzania and Malawi to Puma Energy, a unit of Netherlands-based Trafigura [TRAFG.UL].

Europe’s second-largest oil company by market value is raising $25 billion to $30 billion by the end of 2011 to help pay for its Gulf of Mexico oil spill.

“We provide to Trafigura access to a market that is not easy to target for a trading company...it’s a way for us to get down the value chain,” said Pierre Eladari, chairman of Puma Energy, adding that it will look for further African downstream growth opportunities as major oil firms divest.

“There are additional opportunities on the continent which we will see as a way of expanding our position in these markets. There are also opportunities in the world: in South America and also in Asia,” said Eladari.

Angola’s state-owned oil company Sonangol will buy a 10 percent stake in Puma’s newly acquired assets, Puma said.

DOWNSTREAM PUSH

Oil traders such as Trafigura have not historically involved themselves in fuel retail businesses, although the deal follows the sale by Royal Dutch Shell (RDSa.L) of 1,300 retail sites across Africa to Vitol, the world’s largest independent energy trader in July.

Eladari said the new storage assets will mainly be used to supply regional markets but could also help support Trafigura’s international flows of oil products.

The deal must be approved by local regulators. Trafigura’s chequered past in Africa could be a barrier to this.

A Dutch court fined Trafigura 1 million euros ($1.3 million) in July for illegally exporting toxic waste to Ivory Coast which ended up being dumped in the open air.

Trafigura agreed in 2007 to pay a $198 million settlement to the Ivory Coast government, which exempted it from legal proceedings there, but it denied responsibility for the dumping or any wrongdoing.

Trafigura said it is appealing the Dutch court’s decision.

Asked if the Ivory Coast incident was likely to pose regulatory challenges, Eladari said: “Most of our counterparties tend to look at what we bring into the market and Puma Energy has always have had a strong and good reputation in the markets we have been working in. That has been demonstrated in the meetings we’ve had with the authorities.”

The deal is expected to be completed in 2011, Puma said. (Editing by Anthony Barker)

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