Glencore to buy Caltex after Chinese deal fails
Brian Benza | Tuesday October 10, 2017 18:00
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 its statement on Friday, Glencore said it had agreed to buy Chevron’s 75% stake in its South African subsidiary and its Botswana interests for a combined $973 million. The remaining 25% stake will stay with a consortium of Black Economic Empowerment shareholders and an employee trust.
In March this year, Chevron announced that it had agreed to the sale of its assets to China’s largest refiner Sinopec, for nearly $970 million. Glencore stepped in after local shareholders exercised pre-emption rights following delays to the Sinopec deal.
Chevron, which has had a presence in Africa for more than a century, announced plans to offload its South African and Botswana assets in January 2016.
The assets to be bought 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.
The deal with Sinopec had already been granted regulatory approval in Botswana.
At the time when the Sinopec deal was announced managing director of Fuel in Motion Botswana, Imran Sardar told Mmegi Business that the share sale was 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 Botswana’s retail petroleum market.
Kwa Nokeng Oil managing director, Dickson Nyepi said at the time, they expected 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.