China’s Sinopec is the last bidder left in the race to buy a majority interest in Chevron’s South African assets worth $1 billion, Reuters reported on March 18, 2017, citing 2 people familiar with the deal.
Sinopec is close to sealing an agreement with Chevron over the South African assets that the U.S. major 1st said would be put up for sale in January last year.
Following an auction that had lasted more than a year, Sinopec is now the last bidder remaining.
In October last year, France’s oil major Total, mining and trading giant Glencore, and crude oil trader Gunvor had reportedly bid to buy 75 % of Chevron’s South African downstream business.
In January 2016, Chevron said it was considering selling its 75 % of its South African business, including a 110,000-bpd refinery in Cape Town, as part of a multi-billion-dollar divestment plan announced in 2014.
Chevron operates in South Africa via Chevron South Africa (Pty) Limited, in which it has a 75 % stake, while a consortium of Black Economic Empowerment shareholders and an employee trust own the other 25 %.
Chevron South Africa also has a network of Caltex service stations, one of the country’s top 4 petroleum brands, according to Chevron.
The U.S. energy major also operates a lubricants plant in Durban, on South Africa’s east coast.
Now if Sinopec manages to snap up Chevron’s assets in South Africa, it would get its 1st refinery asset in Africa that would further expand the Chinese company’s fuel distribution network across the world.
The process of soliciting expressions of interest in the 75 % shareholding is ongoing, Chevron spokesman Braden Reddall told Reuters.
Rothschild & Co is advising Chevron on the sale of the South African assets.