ExxonMobil has agreed to sell the stake of 65.99% held by its affiliate ExxonMobil Asia in Esso Thailand to Bangchak (BCP) for $603m.

Esso Thailand is an integrated petroleum refining, petrochemical, and marketing firm in Thailand.

The deal involves the Sriracha refinery in Chonburi province, which has a capacity of 174,000 barrels per day, a network of distribution terminals, and more than 700 Esso-branded service stations in Thailand.

According to Bangchak, the deal values Esso Thailand at a fixed enterprise value of THB55.5bn ($1.66bn).

ExxonMobil said that it will continue to supply the Thailand market with finished lubricants and chemical products by forming a new company.

The American energy company said that its upstream operations in Thailand, which are carried out via its affiliate ExxonMobil Exploration and Production Khorat, as well as its Bangkok Global Business Center, which employs nearly 2,000 people, will not be affected by the deal.

ExxonMobil product solutions president Karen McKee said: “As we execute our strategy, ExxonMobil is focusing its investments on global production facilities to meet the world’s demand for lower-emissions fuels and high-performance products, while divesting assets where others see the potential for greater value.”

Bangchak, which is a Thailand-based petroleum refineries company, said that after completing the deal with ExxonMobil, it will launch a tender offer for acquiring the remaining stake in Esso Thailand.

The company said that the assets involved in the deal will be key catalysts for its further growth and margin improvement.

Bangchak group CEO and president Chaiwat Kovavisarach said: “This investment is a step towards greater energy security, balancing our long-term strategy with energy affordability and sustainability. I believe this transformational transaction marks the beginning of a new chapter for BCP and for Thailand.”

The deal, which is subject to standard conditions and relevant legal requirements, including approval from regulatory bodies, is anticipated to close in the latter half of this year.