Petroleum Africa
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Wednesday, October 26, 2016
Chevron’s South African downstream unit has reportedly garnered bids from Total, Glencore, and Gunvor. At the outset of 2016 Chevron said it planned on selling a 75% stake in its South African business unit, which includes its 110,000-bpd refinery in Cape Town and assets in Botswana.
The bidding round for the assets closed on September 30 according to various media reports. The estimated selling price for the assets is $1 billion. In addition to the refinery in Cape Town, Chevron also has a lubricants plant in Durban and retail stations across the country.
Chevron isn’t the only firm with downstream assets in Africa paring operations; it was recently reported that ExxonMobil was selling a stake in its Nigerian downstream unit, Mobil Oil Nigeria.
Indian refining firms are also exiting Africa. One executive from Reliance Industries speaking at the 7th Argus Middle East Gulf & Indian Ocean (AMGIO) Oil Products Conference in Dubai explained the drive to head out of Africa for his company, saying “At a time when private companies were driven out of the Indian market and subsidies going only to public sector, we focused on downstream marketing efforts in Africa. We made a profit, but by then India had deregulated and we needed to go back to India to grow local market and we felt it was a good time to divest in Africa. We just shifted strategies based on opportunities.”
According to Jaskinder Shingwekar, SVP Essar Oil Ltd (India) his company’s exit was based on a need to consolidate. “We had to consolidate and move out of African markets. We chose to stay back only in India and Standoil UK. All we had was a marketing center and it didn’t make much sense for us so we wanted to consolidate existing big assets.”
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