China Petroleum and Chemical Corp. (Sinopec) is nearing an agreement to buy a majority stake in Chevron's South African operations, worth an estimated $1 billion, two people familiar with the transaction told Reuters.
The sources said Sinopec, Asia’s largest oil refiner, was the last bidder remaining, and close to a deal with Chevron after an auction that took more than a year, Kallanish Energy understands.
French oil giant Total and commodity traders Glencore and Gunvor also looked at the assets, Reuters reported last year. Chinese oil companies and merchant traders have become more visible in the hunt for refinery assets that come on the market as oil majors reshape asset portfolios.
Sinopec declined to comment. If the deal is finalized, it will give the Chinese major its first refinery asset in Africa, extending its global fuel distribution network.
Chevron spokesman Braden Reddall told Reuters "the process of soliciting expressions of interest in the 75% shareholding is ongoing.”
Plans to sell the stake in the South African business, which includes a 110,000-barrel-per-day (BPD) refinery in Cape Town, were first announced in January 2016.
Besides the Cape Town refinery, Chevron has interests in a lubricants plant in Durban on the east coast and a network of Caltex service stations, making it one of South Africa's top five petroleum brands.
Financial advisor Rothschild is helping Chevron on the sale of the assets.