Johannesburg - US oil major Chevron is mum about whether it may have found a buyer for its local assets, which have been on the market for more than a year, in the form of Sinopec.
It was last week reported that Sinopec was on the verge of buying the Chevron assets for up to $1 billion (R12.67bn), in a move that would give Sinopec its first major refinery in Africa. In a terse statement, Chevron spokesperson, Braden Reddall, said: “The process of soliciting expressions of interest in the 75 percent shareholding is ongoing.”
Sinopec describes itself as an integrated energy and chemical company. Its operations span, among others, exploration and production, pipeline transportation and sale of petroleum and natural gas; and the sale, storage and transportation of petroleum products, petrochemical products, coal chemical products, synthetic fibre and other chemical products.
Early last year, Chevron offered to sell a 75 percent stake in its South African unit as part of a three-year divestment programme announced in 2014. Chevron’s South African assets include a 110 000-barrels-a-day refinery in Cape Town and a lubricants plant in Durban, as well as more than 800 Caltex service stations.
Claude Illy, leader of sub-Saharan Oil & Gas Merger & Mergers Advisory at Deloitte, said on Monday that the possible deal provided Sinopec with an opportunity to acquire an established and large market share.
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Illy said South Africa
provided a large and growing market “with a clear regulatory framework in the form of import parity pricing.”
The sale, if it went through, would bring to an end speculation about the fate of the assets. While Chevron has said very little about the search for a suitor, various potential buyers have, at different stages, expressed interest in the assets.
Sasol - which has ambitions to increase its market share in the fuel retail market - said it was mulling making an offer to Chevron. But any chances of consolidation in the industry fell through when Sasol decided against pursuing the Chevron assets last year.
According to joint president and chief executive, Bongani Nqwababa, Sasol still wants to increase its market share in the local retail market from the current 11 percent.
Speaking at the release of the company’s presentation of interim results last month, he said the company would grow the market share through organic growth and acquisitions in the next few years.
Sasol has not given reasons why it did not pursue the Chevron assets. And Chevron has played its cards very close to its chest since it announced its intention to sell.
Midstream and downstream oil group, Puma Energy, was among the potential buyers for the Chevron assets. But the company, which has previously bought fuel businesses from oil majors including Chevron in other African countries in the past, earlier this year confirmed that it had considered the Chevron assets. “We looked at the Chevron assets. There was a formal process. We declared our interest,” said Puma chief operating officer Jonathan Molapo in an interview with Business Report in January.