Hess Corp to sell US retail business to Marathon Petroleum for $2.6 bn

US oil and gas company Hess Corp today struck a deal to sell its retail business in the US to Marathon Petroleum Corp for $2.6 billion in cash.

Hess Retail is the largest chain of company operated gas stations and convenience stores along the East Coast with 1,342 locations.

''The sale of our retail business marks the culmination of our strategic transformation into a pure-play exploration and production company,'' said, John Hess, CEO of the New York-based company.

Hess said that it would use the proceeds from the sale for additional share repurchases, as the company has increased its existing share repurchase authorisation from $4 billion to $6.5 billion.

Since the commencement of the program in August 2013, the company has repurchased approximately $2.8 billion in stock.

Hess had in 2010 started to focus on the exploration and development of its most promising lower risk, higher growth, oil-linked E&P assets.

In the first phase of transformation, Hess invested in its most promising assets, including increasing its leadership in the Bakken oil shale, and entered the Utica shale, while acquiring an additional ownership stake in the Valhall Field in Norway.

It closed a joint venture refinery in the US Virgin Islands and divested a number of assets worth $1.7 billion in 2010 in the UK, Norway, and Indonesia, including its East Coast and St. Lucia storage terminal network to Buckeye Partners for $850 million.

Hess followed this up in the second phase by divesting non-core assets worth nearly $2.5 billion across Europe and Asia, including two oilfields in the Azerbaijan sector of the Caspian Sea and its 2.36 per cent interest in the associated Baku-Tbilisi-Ceyhan pipeline, to India's Oil and Natural Gas Corp, for $1 billion. (See: ONGC buys two off-Azerbaijan oilfields from Hess Corp)