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Switzerland-based miner and commodity trader Glencore is nearing a US$1-billion deal to buy the South African assets of Chevron, possibly upsetting an earlier agreement between the U.S. supermajor and China’s Sinopec, Bloomberg reported on Monday, citing three people familiar with the talks.
Last year, Chevron agreed to sell its South African assets, which include a 100,000-bpd refinery in Cape Town and more than 800 gas stations in South Africa and neighboring Botswana.
But the deal between Sinopec and Chevron stalled after Off The Shelf Investments—which owns 25 percent in the Chevron business—decided to exercise its pre-emptive right to acquire the remaining stake.
In October 2017, Glencore said that it would be supporting Off The Shelf (OTS) as their technical and financial partner in the acquisition bid.
Meanwhile, Sinopec has proceeded with the regulatory process in its own bid to buy Chevron’s assets in South Africa.
In March this year, the Chinese firm won a conditional approval from the Competition Tribunal of South Africa to merge one of its units with Chevron South Africa. The conditions include Sinopec recognizing that South Africa would serve as the strategic hub for developing its midstream and downstream operations in Africa, investing more than Chevron South Africa’s current investment plan, keeping the workforce, and investing in lifting the refinery’s production to 90 percent of its nameplate capacity from 75 percent currently.
But a change in the leadership in South Africa’s ruling party, African National Congress, is now said to be tipping the scales in favor of the Swiss miner and oil trader. According to Bloomberg’s sources, Glencore is now favored to buy Chevron’s assets after Cyril Ramaphosa was appointed President of the African National Congress and President of the Republic of South Africa.
Glencore is expected to complete the deal within the next six weeks, one of the sources told Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.