Sinopec Nearing Deal To Buy Chevron’s $1B South African Assets

China's Sinopec is the last bidder left in the race to buy a majority interest in Chevron's South African assets worth $1 billion, Reuters reported on Friday, citing two people familiar with the deal.

Sinopec is close to sealing an agreement with Chevron over the South African assets that the U.S. major first said would be put up for sale in January last year. Following an auction that had lasted more than a year, Sinopec is now the last bidder remaining, Reuters' sources said.

In October last year, France's oil major Total SA, mining and trading giant Glencore, and crude oil trader Gunvor had reportedly bid to buy 75 percent of Chevron's South African downstream business.

In January 2016, Chevron said it was considering selling its 75 percent of its South African business, including a 110,000-bpd refinery in Cape Town, as part of a multi-billion-dollar divestment plan announced in 2014. Chevron operates in South Africa via Chevron South Africa (Pty) Limited, in which it has a 75 percent stake, while a consortium of Black Economic Empowerment shareholders and an employee trust own the other 25 percent. Chevron South Africa also has a network of Caltex service stations, one of the country's top four petroleum brands, according to Chevron. The U.S. energy major also operates a lubricants plant in Durban, on South Africa's east coast.

Now if Sinopec manages to snap up Chevron's assets in South Africa, it would get its first refinery asset in Africa that would further expand the Chinese company's fuel distribution network across the world.

Related: Is Kurdish Oil A Gamble Worth Taking?

"The process of soliciting expressions of interest in the 75 percent shareholding is ongoing," Chevron spokesman Braden Reddall told Reuters.

Rothschild & Co is advising Chevron on the sale of the South African assets, according to Reuters.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Tax Breaks Could Save U.S. Oil Industry Billions
• Growing Asian Oil Demand Could Drain The Supply Glut
• U.S. Shale Is Pushing OPEC To Breaking Point