Motiva Sells 51 Stations to Lavigne Baker

NEW ORLEANS-Lavigne Baker LLC is buying 51 Shell service stations in Greater New Orleans from Houston-based Motiva Enterprises LLC. An energy analyst says the sale isn’t particularly unusual because they were bought by a local operator.

Lavigne plans to retain the Shell name on all locations, according to a press release. “This divestment is in line with Motiva’s publicly stated intent to transition company-owned retail assets to wholesale-supplied locations in an effort to grow the Shell brand in the US and improve the sustainability of the network in the long term,” company officials said. Shell Oil Co. and Saudi Refining Inc. have a 50-50% ownership of Motiva Enterprises.

Philip H. Weiss, senior analyst of energy for New York City-based Argus Research Group, says there are several reasons why Motiva Enterprises could have turned over the assets, including profitability. “Retail operations aren’t all that profitable to the companies, especially when you look at the margins and return on capital,” he tells GlobeSt.com.

Weiss says it’s a typical strategy for companies like Shell so they can focus resources on exploration and production. He explains energy upstream operations, which deal with exploration and production, are more profitable than the downstream operations, which cover refining and marketing. “If you’re looking at obtaining more cash for whatever reason, the retail side is the best thing to dispose of,” he says.

Lavigne Baker, jointly owned by Slidell Oil Co. in Slidell, LA and Lavigne Oil Co. of Hammond, IN. “It appears as if Motiva is transferring those operations to Lavigne because of local expertise,” Weiss says.