Strategic Fuel Fund's bid for Chevron assets not approved - DoE

Johannesburg - The Department of Energy (DoE) said on Thursday the state-owned Strategic Fuel Fund (SFF) had not been cleared to make an offer to buy 75% of Chevron's refinery and other downstream assets.

"An offer to purchase by an entity of the Department of Energy requires express consent from the Minister of Energy as the ultimate Shareholder representative. This was neither sought nor obtained," said DoE director-general Thabane Zulu in a statement.

Bloomberg reported on Wednesday that the SFF said it has expressed interest in buying Chevron’s Cape Town oil refinery, retail-fuel stations, and other assets in the country and in neighboring states.

“SFF has forwarded a commercial offer to Chevron and its financial advisers in relation to the purchase of the 75% interest on offer,” the fund, which manages SA’s fuel reserves, said in an e-mailed statement on Wednesday.

The SFF said it first expressed interest in Chevron’s downstream assets after the second largest US oil producer announced in January that it planned to sell.

Chevron is working with investment bank Rothschild & Co on the sale that may fetch about $1bn, people familiar with the matter said in March.

The South African business operates the 110 000 barrels-a-day refinery in Cape Town, a lubricant plant in the eastern port city of Durban and markets its Caltex-branded products through more than 845 filling stations, according to its website.

Chevron SA won’t discuss details of the expressions of interest, Jill Koopman, the company’s manager for policy, government and public affairs, said by e-mail.

Chevron had objected to plans for the building of more storage facilities to hold fuel imports as the country moved toward the introduction of more stringent clean-fuel standards. The company estimated it would need to spend $1bn in refinery upgrades to meet the regulations.

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