There have been many oil company comings and goings over the years, but Total’s announcement last month about its decision to sell up is unprecedented in terms of oil company exits from the UK.

It will be the first time a traditionally-structured oil company with refinery, supply chain including pipelines, and retail network has announced such a radical move. The assets up for sale include the retail network, home heating oil business, Isle of Man operation, Jersey and Guernsey operations and associated logistics. It follows Murco’s announcement in July to withdraw in much the same way but Murco lacks the same distribution infrastructure.

The UK market is intensely competitive and Total has faced its fair share of hurdles. Just over 10 years ago it merged with Fina and Elf, a huge undertaking from which it took some time to emerge as an integrated operation.

More recently Total UK and four other companies were ordered to pay more than £9m in combined fines and costs for their part in the Buncefield oil depot explosion in 2005. Total was fined £3.6m and was also required to pay a further £2.6m in costs for failing to protect workers and the public. And in January last year, workers went on strike at Total’s Lindsey oil refinery over the use of foreign labour.

Total has around 500 company-owned sites, and around 300 dealers. But, as the industry engages in intense speculation as to who the likely purchasers of the operations will be, retailers are being given the message "It’s business as usual". Richard Laden, Total retail director, said: "The announcement of our UK marketing asset sale process does not change our day to day focus of offering our dealers the best deal in the marketplace, a dedicated local support team and an excellent supply infrastructure. Today, at Total UK, it’s business as usual."

The company is so far remaining tight-lipped about the future. A spokesman told Forecourt Trader: "We’re at the beginning of the process it’s far too early to speculate on who and how. We are looking to sell our UK marketing business as a going concern. We cannot comment on the potential future structure of the business under a new owner.

"The sale process may take many months to complete," added the spokesman. "During this process Total UK will continue to operate as business as usual and work to achieve the fundamental objective of safety, customer care and operational excellence."


Reacting to the news, many Total dealers have expressed sadness and disappointment. Derek Lodge, chairman of Top 50 Independent Rusdene Services, said: "It’s sad for all of those people who have built up Total over the years and these are anxious times for both employees and retailers because we don’t know what will happen to the company and how it will affect the supply chain."

Peter Hockenhull, managing director of Hockenhull Garages, the UK’s eighth largest independent operator, said: "I’m disappointed because I feel that the organisation they have in Total is very good and I suppose I hope that whoever does come along to buy it will retain that structure. The only thing is we’re waiting to hear if it will be sold as a whole or if it will be broken up. I feel they will sell as a whole because it’ll be worth more as a larger operation.

"It’s a sad thing but I think it will be happening to the other major companies as well. I’m disappointed but I have been in the industry since 1964 so I’ve seen a tremendous amount of change so this is just another change."

While some retailers have expressed disappointment, many are philosophical about the move. Susie Hawkins, director of Top 50 Indie Simon Smith Group, said: "For a long time we have realised that we’re going to have to look at other options for fuel supply. We’ve been thinking about having our own brand of fuel and this might just prompt us to do it earlier. I feel as though I should care but I’m not sure if I do. It was no surprise to me it’s a trend among a lot of the oil companies. It doesn’t terrify me.

"We’ve been with Total for a long time and have a good relationship with them and we like working with them. I will be sad if that changes but I’m philosophical about it. It could give us the kick in the rear we need to do something different. We have three years to go on our deal but we had been thinking about next time.

"Other retailers have been thinking the same as us own brand or shop brand on the forecourt? This makes that more of an option. A lot of people are thinking about going down a wholesale route as opposed to a tie with an oil company."

Meanwhile, John Lynn, managing director of the UK’s largest independent forecourt retailer MRH, said: "We’re pretty neutral about it. The only thing is we’re not going to know who our supplier will be but we have 300-odd sites and only 10% are with Total so it’s one of our smaller suppliers. We have a good relationship with them. Potentially it’s an opportunity but possibly a risk.

"Looking at next year we have four or five Total sites due to renew but that won’t worry us. If we don’t like the new supplier we will just change. I suppose for smaller people, who only have four or five sites all with Total, it would be quite a concern for them."

Who will the buyer be?

What will happen next, only time will tell, but the industry is already speculating about who might be in the running to buy the business. "Because of the amount of money involved it’s likely to be another oil entrant wanting to come into the market one of the Chinese, Indians or Russians," said Lynn. Or it could be one of the second-tier operators in the US like Marathon or Valero."

Peter Hockenhull speculated: "The biggest contenders will be Russian and Chinese, but possibly Indian, and I wouldn’t discount one of the Arabian countries. Russia would be number one. Over the years various companies have tried to come into the UK. But they proved that you can’t just put a pole sign up and have success. Now, someone could invest in a network that’s established with a good company-owned site operation. Total has a two-tier operation with TCL and COGOPs so if someone came in and invested in that COGOP operation, they could have a very good two-tier business. I don’t see them breaking it up, but who knows?"

Total Fact File

l On the market: retail network; home heating oil business; Isle of Man operation; Jersey and Guernsey operations and associated logistics

l Lindsey Oil Refinery in North Lincolnshire up for sale since April 2010

l The network: 499 co-owned sites (244 cogops, 16 com-op, 16 licence); 279 dealers

l Background: fourth largest oil company in UK; merged with Fina and Elf in 1999; turnover of £5bn; employs 5,000 people