Glencore said to be near R12.78bn deal for Chevron’s Cape Town refinery, other assets

Glencore - [Google Images]

Glencore is close to a $1bn deal to buy Chevron’s southern African assets, potentially scuppering an earlier agreement with China Petroleum & Chemical Corporation, according to three people familiar with the matter.

The Switzerland-based miner and trader will complete the deal within the next six weeks, said one of the people who asked not to be identified because the information is not public.

The assets include a 100 000 barrel-a-day refinery in Cape Town and more than 800 gas stations in South Africa and neighbouring Botswana.

Chevron agreed last year to sell its 75% holding in the southern African business to the Chinese group known as Sinopec. However, the deal stalled after black-owned minority partners, backed by Glencore, exercised a pre-emptive right on the stake.

A Chevron spokesperson didn’t immediately reply to questions seeking comment, while a Glencore spokesperson declined to comment.

While Sinopec’s deal had political backing in South Africa when it was announced, the change in leadership of the ruling African National Congress and Cyril Ramaphosa’s appointment as president means Glencore is now favoured as a buyer, said the people.

Despite the competition from Glencore, Sinopec has continued with a regulatory process for its own bid to buy the assets and South Africa’s Competition Tribunal in March approved a merger between the company and Chevron’s local unit.

Glencore is supporting black-investor group Off The Shelf Investments Fifty Six Pty Ltd as a technical and financial partner, it said previously.

Off The Shelf’s investors own the other 25% of the Chevron business.