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Sinopec nails acquisition of Chevron African assets for $900 million

Staff Writer |
China Petrochemical Corp, known as Sinopec, said it had nailed an agreement to acquire a refinery and key assets of Chevron South Africa and Chevron Botswana for about $900 million.

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Sinopec said it has signed a sales and purchase agreement with Chevron Global Energy Inc to acquire its 75 percent stake in Chevron South Africa Proprietary Ltd and its 100 percent holding in Chevron Botswana Proprietary Ltd.

Apart from the refinery, under the deal Sinopec has also bought a retail business and storage terminals from Chevron.

The remaining 25 percent interest of the Chevron South Africa is held by a consortium of Black Economic Empowerment shareholders and an employee trust, according to Chevron spokesman Braden Reddall.

Once approved, it will be Sinopec's first refinery on the African continent.

An analyst said the acquisition was meant to convert the site into a profitable storage terminal, using the energy behemoth's downstream experience and advantages.

"Chinese oil companies have become more active in chasing refinery assets worldwide as oil majors reshape asset portfolios," said Li Li, energy research director at ICIS China, a consulting company that provides analysis of China's energy market.

"Sinopec used to focus mostly on the domestic market, but now it's interfacing more with the global market, with its ample expertise and experience."

According to Sinopec, the acquired assets include Chevron's 100,000 barrels per day capacity Cape Town refinery, its lubricants manufacturing plant in Durban, a network of more than 820 service stations with 220 convenience stores across South Africa and Botswana, and storage tanks and oil depot distribution facilities.

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