Chevron unit’s SA buyers still a mystery

ALMOST nine months after announcing plans to sell 75 percent of its South African business unit, energy group Chevron Corporation is mum on potential buyers.

In January, Chevron announced the mooted sale of its South African assets, which include the 110 000 barrel-aday refinery in Cape Town, a network of Caltex service stations and a lubricants plant in Durban.

It said the sale was in line with a three-year asset sales programme it announced in 2014. But yesterday, the company could not respond to requests for comment.

Richard Weissenberg, the business unit leader for the chemicals business unit at Frost & Sullivan Africa, said low oil prices and uncertainty around future prices would make it difficult for potential buyers to fund an acquisition themselves or to raise capital externally.

“In time, buyers for the business as a whole or for key assets – such as the refinery, storage or retail network – will be found,” said Weissenberg.

Chevron’s sale of the assets is part of a trend where major oil companies are selling low-margin assets especially those in the downstream sector.

In other African countries, the move by the oil majors has opened opportunities for smaller and independent oil companies to snap the assets.

Puma Energy, which has said it was constantly looking at opportunities in the 49 markets in which it operated, is one of the companies believed to be eyeing the Chevron assets.

In 2011, Puma Energy acquired Chevron’s fuel marketing businesses in Namibia.

The acquired assets included fuel service stations, bulk fuel storage facilities and a portfolio of industrial customers.

Puma Energy also bought Chevron’s assets when Chevron decided to exit the downstream market in Swaziland in 2014.

Puma Energy said it was looking at both organic growth and acquisitions.

But yesterday the company said it would not give commentary on any business prospects.

Chevron’s sale could also open an opportunity for consolidation in the South African market, with one of the major players buying the assets.

“Consolidation is a possibility, but I do not believe that the existing majors in South Africa have an appetite for a large acquisition at present. A more likely scenario is that a major international oil trading company – Trafigura or one of its competitors – will take the opportunity to build South African presence.

“For the existing majors, this brings the threat of focused, aggressive competition,” said Weissenberg.