Sinopec purchase valued at almost $1 billion
Chinese oil and gas company Sinopec announced it has purchased a 75 per cent stake in Chevron’s South African assets and a subsidiary in Botswana for almost $1 billion.
This is the first major refinery Sinopec has secured in Africa.
The sale to Asia’s largest oil refiner includes a 100,000 b/d oil refinery in Cape Town, a lubricants plant in Durban and 820 petrol stations and other oil storage facilities.
Reuters reports Chevron says it went with Sinopec’s bid over Total’s, commodity traders Glencore and Guvnor, in part because of the better terms and conditions offered, including a commitment to operate the businesses as going concerns and the opportunity to reap strategic value for its longer-term strategy in Africa.
Sinopec says with the middle class in South Africa growing, demand for refined petroleum has increased by 5 per cent annually over the past five years. Currently, demand sits at about 27 million tonnes.
The deal is subject to regulatory approval.
In 2012, Sinopec partnered with PetroSA to help develop a new greenfields refinery that has since been shelved because of high costs. Sinopec has agreed to retain the entire workforce as well as the existing Caltex brand for the retail fuel stations for up to six years before launching a rebranding strategy.
