Exxon Says to Open Gas Stations in Mexico, Invest $300 Million

Reuters

MEXICO CITY, May 17 (Reuters) - Exxon Mobil Corp announced it will bring its Mobil-brand gas stations to Mexico, pumping $300 million in the coming decade as it seeks to gain a foothold in the country's retail fuel market.

Exxon expects to open its first service stations in Mexico later this year and will offer motorists its Synergy gasoline and diesel fuels, the U.S. oil company said in a statement on Wednesday.

The plan follows BP Plc's announcement earlier this year that it would open about 1,500 service stations in Mexico in five years. Britain's BP told Reuters Wednesday that its foray into Mexico is proving more promising than expected, and that it would likely increase its investments in everything from exploration to retail fuel sales.

Exxon did not specify how many stations it would open in Mexico or where it would source the fuel for them.

But local newspaper Reforma reported on Wednesday that Exxon company official Martin Proske said in an interview that supply options included importing fuel via train or boat or buying gasoline from Pemex.

Mexico, Latin America's No.2 economy, is home to about 11,400 gas stations and is the world's fourth biggest gasoline market, Mexico's energy minister has said.

For decades, Mexico's fuel market was closed, by law, to any company but state-owned Pemex. But a 2013 reform ended Pemex's monopoly in everything from crude production to retail sales.

"Recent energy reforms present a unique opportunity to help meet the growing demand for reliable fuel supplies and quality service in Mexico," Proske said in a company statement.

Exxon's announcement is more good news for Mexico after General Electric Co praised the country as vital to its growth last week and Siemens said later that it was going to swap out U.S. imports for local supplies at its Mexican plants.

Fears had grown in Mexico that foreign investment might fall after Donald Trump was elected U.S. president last year, as he railed against companies that moved operations to Mexico.

U.S.-Mexico relations have also been strained by Trump's threat to ditch the North American Free Trade Agreement and his promise to build a wall between the two countries.

Trump's Secretary of State, Rex Tillerson, is the former chairman and chief executive of Exxon.

Mexican authorities are struggling to contain growing fuel theft by criminal gangs that Pemex has said is costing it some 27,000 barrels per day in gasoline and diesel.

(Reporting by Veronica Gomez and Mitra Taj Editing by W Simon and Diane Craft)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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