Chevron to Sell Shares of Assets in South Africa, Botswana to Sinopec

(Beijing) — Chevron Global Energy Inc. has agreed to sell shares of its assets in South Africa and Botswana to Sinopec Group, one of China’s largest oil companies, for $900 million.

The deal will allow Sinopec to own 75% of the shares of Chevron’s branch in South Africa and 100% shares in the Botswana subsidiary, Sinopec announced on Wednesday.

In the next five to six years, Sinopec will rebrand Chevron’s 820 Caltex gas stations in the two countries with the Chinese company’s name, as well as take over a refinery plant in Cape Town and a lubricating-oil plant in Durban in South Africa, plus 220 convenient stores and other warehouse and distribution facilities.

Sinopec said it secured the deal through rounds of bidding. Several big names in the industry, including France’s Total SA, multinational commodity trading giant Vitol Group and rival Glencore PLC, have reportedly been bidders.

The company has already reported the deal to Chinese authority, and is waiting for approval by authorities in South Africa and Botswana.

In the past five years, Sinopec has poured $6 billion in oil and storage projects in six countries even as profits have plummeted. Although some of the past acquisitions turned out to be old oil wells with low yields, the company is continuing its buying spree.

Its latest move overseas was an agreement last week with Saudi Arabian company Saudi Basic Industries Corp., which involves joint petroleum chemical projects in both countries, according to the Sinopec announcement.

Chevron, which has seen revenue drop for the past two years, has been seeking to spin off some other assets. Its potential sale of stakes in offshore oil fields in northern China has stalled, as proposals didn’t meet its expectations of $1 billion, Bloomberg News reported on Tuesday.

Contact reporter Coco Feng (renkefeng@caixin.com)