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The Arizona Republic: Shell back at Valley pumps: “Shell Oil Co. is moving back to metro Phoenix and is putting up its familiar yellow king-scallop shell on 55 former Texaco stations, including many Circle K stores with branded pumps, and 11 ExxonMobil stations.” ( 19 Feb 05


Max Jarman


One of the world's most recognized trademarks in gasoline is returning to the Valley after a more than 20-year hiatus.


Shell Oil Co. is moving back to metro Phoenix and is putting up its familiar yellow king-scallop shell on 55 former Texaco stations, including many Circle K stores with branded pumps, and 11 ExxonMobil stations.


Shell spokesman Cameron Smyth said the company is eager to build up its brand in the Valley and is marketing its name to independent stations and those that have recently lost an affiliation with another brand.


Shell is coming back at a time when other major oil companies are discontinuing their branded dealer programs. They are opting to sell gas through company-owned locations or to independent operators at spot prices.


Branded dealers own their own stations but sell gas under a major oil company's brand.


In the past year, ExxonMobil has discontinued supply contracts with most of its branded dealers in the Valley to focus on company-owned locations.


Patty Delaney, a spokeswoman for ExxonMobil Corp., said the company concluded it could make more money supplying its own stations than supplying those operated by branded dealers. ChevronTexaco also has canceled many of its branded dealer relationships.


That has resulted in a proliferation of independent dealers selling unbranded gas in locations that a few months ago carried a major company's banner.


"There are a lot more independents than there were a year ago," said Luz Rubio, executive director of the Automotive Service Association, a trade group for independent service stations and auto repair shops.


BP spokesman Dan Cummings said the company's ARCO unit in the Phoenix area continues to supply its ARCO-branded dealers, which include am/pm stations.


Mike Kapanicas, who has been selling Mobil gas in the Valley for 21 years, is converting his 11 Valley Superpumper stations to Shell locations. But for Kapanicas, it's a homecoming of sorts. He started out as a Shell dealer in 1967 at Granite Reef and McDowell roads in Scottsdale.


It was called Mike's Shell Service, and gas cost 27 cents per gallon.


"I started with Shell and now I will retire with Shell." Kapanicas said, adding that he plans eventually to turn the business over to his children.


In 1984, Shell changed its marketing strategy and pulled out of the Phoenix market. That forced Kapanicas to forge a relationship with Mobil Oil, now ExxonMobil Corp.


Shell came back to the Valley in 1998, but sold its products under the Texaco brand through a joint refining and marketing operation called Equilon Enterprises. In 2002, Shell bought out Texaco's interest in Equilon under terms of Texaco's $45 billion merger with Chevron Corp.


Since then, Shell has been rebranding the Texaco stations supplied by Equilon. "We're just now getting to Phoenix," Smyth said, noting 75 Arizona stations outside metro Phoenix already have been converted.


Smyth said many of the stations will undergo interior remodeling to conform with a uniform Shell image that will be used on all of its stations throughout the world.


While many dealers have given up their brand affiliations in favor of lower-cost independent operations, Kapanicas said many customers still feel more comfortable buying gas with a well-known name.


He said he was drawn to Shell because of his prior affiliation and an attractive credit card program. A Citibank-issued Shell MasterCard offers consumers a 5 percent rebate on gas purchases.


"At today's prices, that's a savings of 9 cents per gallon," Kapanicas said.


AAA Arizona reported the price of unleaded regular in Phoenix on Friday at $1.96 per gallon.


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