Sinopec nears deal to buy Chevron's South African assets
NEW YORK/SINGAPORE (Reuters) -- China's Sinopec is nearing a deal to buy Chevron's South African oil assets for up to $1 billion to secure its first major refinery on the continent, several people familiar with the matter said.
Photo Courtesy of Chevron.
China Petroleum and Chemical Corp, or Sinopec, Asia's largest oil refiner, was the last bidder remaining, and close to a deal with Chevron after an auction that spanned more than a year for its refinery, retails business and storage terminals.
French oil firm Total and commodity traders Glencore and Gunvor looked at the assets, Reuters reported last year.
The South Africa government's desire to keep the refinery operating has nevertheless proven to be a major stumbling point for buyers who would prefer to convert the site into a more profitable storage terminal, sources said.
Sinopec is in discussions with the government on ways to keep the 110,000-bpd refinery in Cape Town running, but talks could still fail, sources said.
The sources declined to be identified because they were not authorized to discuss the matter publicly.
Chinese oil companies and merchant traders have become more visible in chasing refinery assets that come on the market as oil majors reshape asset portfolios.
Sinopec declined to comment.
Chevron spokesman Braden Reddall said "the process of soliciting expressions of interest in the 75% shareholding is ongoing". Plans to sell the stake in the South African business, including the Cape Town refinery, were first announced in January 2016.
Besides the refinery, Chevron has interests in a lubricants plant in Durban on the east coast, storage tanks and a network of Caltex service stations, making it one of South Africa's top five petroleum brands.
Financial advisor Rothschild & Co is helping Chevron on the sale of the assets.
The remaining 25% interest is held by a consortium of Black Economic Empowerment shareholders and an employee trust.
Reporting by Jessica Resnick-Ault and Florence Tan; Additional reporting by Ron Bouss and Dmitry Zhdannikov in London, Joe Brock in Johannesburg and Chen Aizhu in Beijing; writing by Anshuman Daga; editing by Kenneth Maxwell and Susan Fenton
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