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Andeavor’s Big Mexico Push

Refiner expects to supply hundreds of Arco sites with fuel from its U.S. refineries

SAN ANTONIO -- Andeavor plans to supply as many as 400 Arco-branded stations in Mexico as it continues to expand its retail network in the country.

In an interview with S&P Global Platts, Leonardo Giron, Andeavor’s marketing director for Mexico, said the company has a goal of supplying 200 to 400 Arco-branded sites. As of late July, it had more than 83 Arco stations in northwestern Mexico. 

"At any time, we expect to announce our retail goals for Sonora, Baja California Sur and Sonora," Giron told S&P Global Platts. "We expect this to be a good number."

In July 2017, Tesoro Corp., which was renamed Andeavor in August 2017 after its acquisition of Western Refining, signed an agreement with fuel distributor ProFuels to supply fuel and introduce the Arco brand in the Mexican states of Sonora and Baja California. 

Andeavor also plans to ramp up its exports of gasoline and diesel into Mexico from its current 15,000 to 20,000 barrels per day (bpd). A lack of infrastructure has slowed the growth of U.S. wholesalers in Mexico since the country began deregulating its fueling market two years ago. Previously, the state-owned oil company Petroleos Mexicanos (Pemex) had a virtual monopoly on the market. As of June, privately owned companies have imported about 18,366 bpd of gasoline and 62,000 bpd of diesel. Andeavor has won two contracts with Pemex that provide it with storage and pipeline capacity.

The refiner plans to have a regional presence in northern and northwestern Mexico, although this may change after its acquisition by Marathon Petroleum closes. 

"Right now, our strategic vision for Mexico is to seek opportunities to import our own fuel at an economical price from our U.S. refineries," Giron told S&P Global Platts. "However, this could change once the fusion with Marathon is approved."

Andeavor was one of first of a wave of foreign refiners entering the retail fuel business in Mexico. Most recently, Phillips 66 saw the first 76-branded locations open in Mexico through a licensing agreement with fuel distributor Windstar LPG.

San Antonio-based Andeavor operates 10 refineries. Its retail marketing system includes more than 3,200 outlets under brands including Arco, SuperAmerica, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant. 

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