RE:RE:RE:Powerhouse - Lookout World Here We Come no doubt that's the real story. The optim time to exit retail gas stations was 5+ years ago. IMO sold their gas stations for $5.6 million/station in 2016, Cenovus sold their (Husky) gas station in 2021 for $1.25 million/station. SU likely seeing offer at $1 million or less per station. I'm glad SU didn't blow off their retail chain at fire sale price. That's why i didn't support selling (from old post) petrocan station when elliot showed up, i knew we would get stink bid for them. Potential buyer has very little down side from here but is not paying any upside for prime real estate, future business as mentioned by migrainecall. I have not come across brand name gas stations that do brakes and oil change anymore in my area.
i think in the long term, some smaller volume gas stations in undesirable location could be closed, and business for the key stations will be brisk. I do not believe this would hurt SU's refined product sales as excess volume can be exported to US or asia thru TMX. There are plenty of gas scooters around the world that won't be switch to e-scooters. Cost, availability of power grid and plug ins will keep gas scooters around for a while longer yet.
look like the rumor of china relinquishing lockdown was premature. I still believe china has to relax its zero covid one day. XI saving face no longer meaningful as the world is now laughing at china's zero covid policy.
Experienced wrote:
newcoin wrote: This is what I wanted to hear - strength, commitment and confidence:
"After careful consideration, the Board has concluded that retaining and optimizing the Company's retail business will generate the highest long-term value for shareholders and therefore, has unanimously decided to retain and continue to optimize the network and expand strategic partnerships for the Petro-Canada retail business that enhance our capabilities and capture increased revenue and cash flow opportunities," said Board Chair Mike Wilson. "Petro-Canada is a unique, differentiated, and strategic asset due to its strong national network and best in market consumer brand and loyalty program."
One of my friends who was a senior bureaucrat in the Federal Government called me after reading the news regarding the SU decision concerning PetroCanada. Back in the day he worked in the Energy Department was a key figure in the privatization of PetroCanada and subsequent events.
He couldn't stop laughing during our conversation as he had drafted over the years countless Government PRs for Cabinet Ministers where the true facts were sugar coated and written to create the wrong inpression. He said a truthful PR would read as follows....
"The company contacted and entered into discussions with a number of potential suitors. After serious exploratory talks with these suitors, none of them were willing to buy PetroCanada for a price that the company was hoping for. Sale of PetroCanada at the price they were willing to pay was less than the value of the company to Suncor at the present time. That combined with the fact that a sale would involve a further writedown of that asset following the writedown for Fort Hills, the Board determined that such an action would be detrimental to its shareholders."
He further told me that the primary reason that suitors were not ready to pay a big price for PetroCanada was simple math. As the number of EVs grows over the next couple of decades and the owners charge their vehicles at home, sales at traditional gas stations like Petrocanada will plummet. Further, EVs don't require oil changes and much reduced need for brake jobs so the bread and butter of the PetroCanada garages will also plummet.
The end result in his opinion is that Suncor has decided to keep an albatross around its neck as opposed to taking its lumps and using the proceeds to grow the company.