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SALT LAKE CITY -- ChevronTexaco Corp. is selling its retail operations in Salt Lake County to Provo, Utah-based Mike Peterson Oil Co.
The sale, which is expected to close before the end of September, includes more than a dozen Chevron-owned stores and contracts to supply another 55 independently owned branded outlets. It will give Mike Peterson Oil the dominant share of the retail gasoline market in Salt Lake City.
"Once we close on the sale, we'll have about a 30 percent market share, which is virtually unheard of in this business," said Mike Peterson, founder of the 10-year-old company that generates annual revenue of approximately $80 million. Terms of the sale were not disclosed, but Peterson acknowledged industry estimates place the value of the transaction at between $60 million and $65 million, according to The Salt Lake Tribune.
Mike Peterson Oil already owns seven Chevron-branded convenience stores in Utah County that operate under the Extra Mart name. It also holds contracts to supply an additional 24 independently owned Chevron locations in Utah Valley. The addition of Chevron's Salt Lake retail presence and supply agreements could push Mike Peterson Oil's annual revenue to approximately $300 million. "This is a huge move for us," Peterson said, noting the company's work force will grow from approximately 150 to more than 1,000.
Chevron's sale is part of a restructuring of the petroleum giant's retail operations, the report said.
"Our Utah retail operations, with the exception of Salt Lake County, predominantly have been served by jobbers for years," Chevron spokesman Dan Johnson said. "We recently took another look at how we're operating there and it just made sense to go all the way [and sell the stores]."
Johnson noted Chevron already has turned over its retail operations in a number of its markets, primarily in the Southeast, to independent operators. "You look at your investments from time to time and figure out how best to serve individual areas," Johnson said.
Mike Peterson Oil expects eventually to change the name of the 12 Salt Lake area stores it acquires to Extra Mart. Beyond that, the transaction should be transparent to Salt Lake motorists, said Gerry Tedrow of the Western Petroleum Marketers Association, which represents approximately 60 independent petroleum jobbers in Utah.
Along with its retail operations, Mike Peterson Oil also operates a bulk oil business that sells motor oil and other products to large industrial customers. "We'll be taking a hard look at that operation. We may want to spin it off, but if we keep it, will have to eventually build a bulk plant warehouse somewhere in the Salt Lake Valley," Peterson added.