China’s acquisition of Chevron could spark investment boom

The announcement last night (Thursday) that the China Petroleum and Chemical Corporation (Sinopec) was a step closer to buying Chevron’s South African assets – including its oil refinery and fleet of over 1 000 Caltex petrol stations – could spark the Chinese investment boom which South Africa has been waiting for, according to business analysts.

Minister of Economic Development, Ebrahim Patel - while being careful to reiterate that it was not government’s decision to make a call between the two bidders (Glencore and Sinopec) – said the commitments by Sinopec “show a strong appetite by global investors for long-term investment in SA”.

He has been negotiating with Sinopec to “ensure that proper public interest conditions, in line with the Competition Act, should apply". The terms of the agreement, should the Sinopec bid be successful, will include using SA as its base to expand its African refining and downstream business.

The company has also undertaken to set up a US$15m fund to promote economic development in SA and to increase black economic empowerment ownership of the local company, the petrol filling stations which trade under the Caltex brand.

Glencore said in a statement on Thursday there was no change in its position and that it was “making good progress in satisfying conditions to complete the transaction”.

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