Banners
Banners

Latest News

FRANCISTOWN: Tonota police have dismissed a circulating audio recordin...
The country is officially on its third day of the 28-day COVID-19 lock...
With the country on lockdown due to the novel coronavirus, the Botswan...
While the country, just as the rest of the world is going all out to f...
Banners
Banners

Chinese oil giant buys Caltex Botswana

BRIAN BENZA
Caltex PIC: MORERI SEJAKGOMO
Chinese oil giant, China Petrochemical Corporation (Sinopec) has inked a deal to take over the assets of Chevron Energy Group in Botswana and South Africa for a combined amount of $900 million (P9 billion).

Chevron operates in Botswana using the Caltex brand name in the retail market operated by a company called Fuel in Motion while its commercial business is run through Kwa Nokeng Oil.

In a statement, the Chinese oil company said after a public tender process, its listed arm China Petroleum & Chemical Corporation (Sinopec Corp) has signed a sales and purchase agreement with Chevron Global Energy to acquire 100% equity in Chevron Botswana as well as 75% equity in Chevron South Africa (CSA) for approximately $900 million.

The other 25% equity of CSA will continue to be held by a group of local shareholders, as requested by South African regulations.

The assets include CSA’s Cape Town Refinery, which has a refining capacity of 100,000 barrels per day, its lubricants manufacturing plant in Durban, a network of over 820 service stations, with 220 convenience stores, across South Africa and Botswana, and storage tanks and oil depot distribution facilities.

“The SPA has already been filed with the Chinese government and remains subject to regulatory approvals in South Africa and Botswana.

“With a growing middle class, demand for refined petroleum in South Africa, the largest country in the region, has been increasing at an average annual rate of nearly five percent during the last five years, currently reaching a total of approximately 27 million tonnes,” said Sinopec.

With this investment, Sinopec says it looks forward to becoming an integral part of South Africa and Botswana’s local economies.

 Managing director of Fuel in Motion Botswana, Imran Sardar told BusinessWeek that the share sale to Sinopec is not expected to have a significant impact on the Botswana business.

“We see the takeover having very little or no impact on our business as a branded marketer for Chevron,” he said. Caltex is estimated to hold about 15% of

Banners
Botswana’s   retail petroleum market.

Sinopec said it is their intention to maintain the entirety of the local workforce and ensure that the operations and services to customers are uninterrupted during the ownership transition. The Chinese company said it would also retain the existing Caltex brand for the retail fuel stations for a period of five to six years before launching a rebranding strategy.

 Kwa Nokeng Oil managing director,  Dickson Nyepi  said  they expect no impact on their business from the sale  as the company has evolved over the years  from being  an exclusive commercial fuels and lubricants distributor for Chevron  to being more independent.

 “With foresight following announcement by Chevron to sell its majority shares in Botswana and SA, Kwa Nokeng management decided to diversify its sources of fuels and lubricants supply.

“Today, Kwa Nokeng Oil is sourcing its fuels indirectly through a number of the local oil majors. Kwa Nokeng Oil is also able to import its fuel requirements independently to supply its customer base. “The anticipated sale of Chevron Botswana doesn’t have any foreseen impact on Kwa Nokeng Oil operations,” said Nyepi.

Subject to the transaction being approved by relevant regulatory authorities, Sinopec says it intends to enable technological improvements and upgrades for all of the acquired assets to help meet increasing local demand for quality products as well as contribute to the development of the indigenous oil industry.

Over the past five years alone, Sinopec has invested a total of $6 billion in downstream businesses in six countries.

Sinopec Group is China’s largest manufacturer and supplier of petroleum and petrochemical products, and the second largest producer of crude oil and natural gas. It has the third largest sales and distribution network worldwide and was also ranked the fourth in Fortune Global 500 in 2016.



Business

Banners
Banners

Selefu

A luta continua

Latest Frontpages

Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper
Banners