While other major oil companies began divesting their retail assets starting in the mid-1990s, Andeavor is strongly swimming against the current.
Andeavor renamed itself last year from Tesoro Corp. after its acquisition of El Paso, Texas-based Western Refining. It has amassed a retail-marketing system that includes about 3,200 gas stations and convenience stores, marketing fuel under brands such as Arco, SuperAmerica, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant.
Those stores are now in the hands of Michael Morrison. As the company’s senior vice president of marketing, Morrison announced his company intends to create a single offering across its retail chain, a network that stretches from Southern California with ampm to SuperAmerica in Minneapolis-St. Paul.
“Where our opportunity lies is to be exceptional at both fuel and convenience marketing,” said Morrison on a Dec. 5, 2017, investor call. “We’re on target to achieve $50 million in synergies from the Western business, as well as adding $300 million of profitability growth, and it will achieve $1.2 billion of EBITDA by 2020.” An integrated marketing, logistics and refining company with 10 refineries, Andeavor will convert some of its stores from a multisite operator (MSO) model to company-operated locations, Morrison said. It’s a definitive re-entry into convenience retailing, with the company intending to build new stores, boost sales and margins, and bring in expertise acquired in the Western Refining purchase to meet store-level goals, he said.
“Our objective is to be a leading convenience marketer,” Morrison said. Morrison’s c-store experience comes with a chain now part of the Circle K network. Prior to Andeavor, he held executive positions at the London office of Houston-based Phillips 66. He has also held several leadership positions within marketing, strategy, commercial supply and trading logistics, optimization and specialty products at Conoco, ConocoPhillips and Phillips 66.
$450 million—Andeavor’s c-store margin-contribution goal for 2020—up from $250 million today