Exit Strategy: Chevron to Pull Name From Some Stations Out East

A number of Big Oil companies began the exodus from the retail fuel industry earlier this year. The latest is Chevron, which announced recently it will withdraw its motor fuel operations in some areas of the Eastern United States as part of its strategy to leave markets where it is not competitive.

The second-largest U.S. energy producer will debrand about 1,100 independently-owned and operated retail stations in Washington D.C. and a number of Eastern states including Delaware, New Jersey and Maryland, according to Chevron spokesman Gus Santoyo in an e-mailed statement. Chevron expects to complete the planned market exits by mid-year 2010. The company will maintain its lubricants operations in the eastern U.S. and its Mississippi refinery.

Chevron will focus its retail fuel business in growth areas like the West Coast, where the company has a position of strength, Santoyo said in an e-mail. After careful study of the markets, it's apparent they do not fit well into our current manufacturing infrastructure, Santoyo added.

Earlier this year, Exxon sold its On the Run convenience store franchise system to the owners of the Circle K brand. Chevron's debranding is a bit different. Chevron only supplies fuel to the stations it is exiting and it will supply more 5,000 stations in the region. But the move is just further indication that integrated oil companies in the U.S. are taking a hard look at their retail fuel businesses. Exxon, for example, believes that consumption of gasoline has peaked and demand in the U.S. will shrink 22 percent between now and 2030. BP, Sinclair and ConocoPhillips also have moved away from the retail fuel business. BP announced late 2007 it would sell all of its company-owned and company operated-convenience stores over the next two years.