Omera Petroleum to acquire Totalgaz Bangladesh for $32m
Bangladeshi energy firm Omera Petroleum is set to acquire the local operations of French company Totalgaz in a deal valued at $32 million, or approximately Tk390 crore. The acquisition will strengthen Omera's hold on the liquefied petroleum gas (LPG) market, where it already commands a 22% share. Totalgaz currently holds around 5%
According to sources from both companies, the deal allocates $19 million to equity, while the remaining $13 million will cover liabilities and assets, including outstanding bank loans.
Months of negotiation and a struggling exit
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The transaction follows months of complex negotiations. Talks were at times hindered by resistance from local shareholders holding an 11% stake in Totalgaz Bangladesh. However, France-based Totalgaz was keen to exit the market after enduring annual losses of Tk15-20 crore for several years.
"Both sides have agreed and exchanged legal documents. We'll sign the deal soon," a senior Omera official told The Business Standard.
Omera's expansion and market landscape
Omera Petroleum, owner of Omera LPG, is a joint venture comprising MJL Bangladesh (62%), BB Energy (Asia) Pte Ltd (25%), and Dutch development bank FMO (13%).
Totalgaz entered Bangladesh in 2002 and rapidly became one of the top three LPG importers and marketers. However, it lost ground to local players that invested aggressively in a market fully dependent on imports.
Totalgaz's operations include the import, storage, bottling, and marketing of LPG in cylinders of 12kg, 15kg, and 33kg, as well as bulk supply for industrial use. The company also owns a 100,000-tonne capacity terminal in Sitakunda and a secondary facility in Bogura.
LPG sextor booming despite shakeups
Bangladesh's LPG sector has transformed dramatically since 2010, when demand hovered around 70,000 tonnes. Today, it stands at approximately 1.7 million tonnes annually, growing at 15-20% each year, and is projected to hit 3 million tonnes by 2030.
The shift gained momentum in the early 2000s as concerns over depleting natural gas reserves prompted the government to restrict new pipeline connections and encourage LPG adoption. Since 2009, 58 LPG licences have been issued.
Major conglomerates like Bashundhara Group, Jamuna Spacetech, Beximco, Meghna, and City Group have entered the fray. However, rising operational costs and stiff price competition – including free cylinder offers – have strained some companies. A number of them are now seeking to exit the business due to growing liabilities and unsustainable subsidies.
