ExxonMobil has started exclusive talks with Canadian fuel retailer North Atlantic over the sale of its stake in its French subsidiary Esso, including its Gravenchon oil refinery, the company announced on May 28.

A statement from ExxonMobil said it is negotiating with North Atlantic France over the acquisition of its entire 82.89% stake in the Esso business and its assets, including the 240,000 b/d refinery it operates in Normandy.

The companies are also discussing the sale of a 100% stake in ExxonMobil Chemical France, the statement said.

Subject to regulatory approval, the deal is expected to close in Q4 2025, after which North Atlantic will file a mandatory tender offer for the remaining shares of Esso SAF.

The Esso business is responsible for roughly 20% of the active refining capacity in France through its operation of Gravenchon and separate lubricants plant, according to its estimates.

Across the country, Esso also markets fuel and lubricants through a branded reseller network of around 750 sites.

In a new landing page on its website, North Atlantic set out aims to develop a “green energy hub” at Gravenchon with new low-carbon fuels and renewables projects, adding that the site is well-positioned to serve energy-intensive industries like data centers.

North Atlantic’s retail business in Eastern Canada and French territories Saint Pierre and Miquelon could also offer offtake certainty for the refinery, the company said, supporting strong utilization rates.

French divestments

For ExxonMobil, the Esso deal marks the culmination of a string of French divestments as it has concentrated on its US and Asian assets.

In 2024, the company began significantly downsizing its French downstream business, closing its chemicals operations in Gravenchon and later selling its 140,000 b/d Fos-sur-Mer refinery to a Trafigura-backed joint venture.

Completion of the Esso deal will leave ExxonMobil with just four remaining refinery stakes in Europe: Antwerp, Rotterdam, Fawley, and Germany’s MiRO.

Once a key asset for Exxon, Gravenchon attracted significant investment at the beginning of the decade, boosting yields of high-value products and helping it capture market share when rival Grandpuits stopped operating in 2021.

As France’s second-largest refinery, the site benefits from a direct pipeline connection to Paris airports and export flexibility from the nearby Le Havre terminal.

Nonetheless, the closure of the Gravenchon steam cracker signaled fading appetite from ExxonMobil to continue operating the site long-term, closing off the opportunity to capitalize on stronger petrochemicals integration as fossil fuel demand stalls.

In its statement, ExxonMobil said that the proposed sale aligns with its wider strategy, but stressed that Europe remains an “important region” for the business.

“ExxonMobil has been operating in France for over 120 years, and we plan to maintain a significant commercial presence with the Esso brand,” said Tanya Bryja, senior vice president of ExxonMobil Product Solutions.

Meanwhile North Atlantic CEO Ted Lomond called the acquisition a “pivotal moment” for the Canadian company to establish a European presence for the first time.

“We are eager to consolidate Gravenchon’s role as a vital center of French energy and industry for decades to come and grow North Atlantic into a premier transatlantic energy company,” he said.

European contraction

Analysts have warned that the exodus of IOCs from the European refining sector could precede a structural decline in margins around the turn of the decade.

According to an analysis by S&P Global Commodity Insights, ExxonMobil has already slashed its European refining capacity by around a third since 2000, mirroring downsizing by competitors such as Shell.

And as European producers eye rising operating costs and stalling oil demand, new global competitors in the Middle East, Latin America and West Africa promise to accelerate another wave of closures. Based on surplus capacity alone, the International Energy Agency sees at least 1 million b/d of European refining capacity at risk of closure by 2030.

After selling its Italian Augusta and Sarpom refineries and closing its 116,000 b/d Slagen site in Norway in 2021, ExxonMobil recently tried and failed to shed its stake in Germany’s largest refinery, MiRO, only to be blocked in court by co-owner Shell.

The exit of established refiners has encouraged smaller energy players and traders to venture into the sector, often with the aim of transforming assets to reduce their emissions.

Experts have warned that only investors with deep pockets, such as major commodity traders, will be equipped to properly fund billion-dollar decarbonization projects. However, Commodity Insights oil analyst Samy Tamarat said the transaction could signal a “potential lifeline” for Gravenchon.

“While the company’s low-carbon fuels ambitions will require significant investment, it will ensure the site has a future in a market where demand for traditional refined oil products is declining,” he said.

The completion of the Esso deal will include conditions to ensure continuous crude oil supply for Gravenchon and lasting purchase agreements for ExxonMobil, the company statement said. The deal valued Esso shares at Eur 149.19 ($168.86) per Esso share, before adjustments for changes in inventory value, cash payouts and other changes.

By Kelly Norways , Spglobal / May 28, 2025