Exxon Mobil to Enter Mexican Gas-Station Market
May 17 2017 - 4:13PM
Dow Jones News
By Anthony Harrup
MEXICO CITY -- Exxon Mobil Corp. plans to open its first Mexican
service station in the second half of the year, joining the likes
of BP PLC in the country's newly opened motor-fuels market.
Exxon Mobil said Wednesday that its first Mobil-brand station
will be located in central Mexico, and that others will follow this
year. The company plans to invest $300 million over the next decade
in fuels logistics, product inventories and marketing.
"Recent energy reforms present a unique opportunity to help meet
the growing demand for reliable fuel supplies and quality service
in Mexico, " the Irving, Texas, company said in a release.
Exxon Mobil is the latest oil major to take the plunge into
Mexico's 800,000 barrel-a-day gasoline market, which was opened to
foreign investment last year. BP launched its first service station
in March and expects to have 1,500 in operation after five
years.
Until last year, Mexico's gas stations were all franchises of
state-oil company Petróleos Mexicanos, which was also the only
gasoline and diesel supplier. Under the 2013 overhaul of the
country's energy laws, the market is undergoing a makeover.
Companies other than Pemex are allowed to import and distribute
fuels, and Pemex is no longer the only brand of service
station.
Local brands such as Oxxo Gas, a chain owned by beverages and
retail conglomerate Femsa, are vying for a slice of the market.
Regulators recently approved the first gasoline "buyers club" among
existing franchisees who find themselves competing on price for the
first time.
Retail gasoline and diesel prices are being freed from
government control, a process that began in March in some northern
border areas and is expected to be completed nationwide by the end
of the year.
With only one service station for every 3,000 vehicles, compared
with one for every 1,650 in the U.S. and 2,220 in Canada, according
to energy officials, Mexico has plenty of room for expansion. Poor
quality of service, including pumps that deliver less fuel than
they charge for, has been a problem at many stations, and
competition is expected to help resolve that.
Exxon Mobil said it plans to use its traveling laboratories to
make periodic visits to its stations to analyze fuel quality and
make sure pumps work properly and safely.
Exxon Mobil has chemicals and lubricants businesses in Mexico,
and last year won a contract to develop reserves in the Gulf of
Mexico in a consortium with France's Total SA in the Mexican
government's first auction of deep-water areas.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
May 17, 2017 15:58 ET (19:58 GMT)
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