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UPDATE 1-South Africa wants Sinopec to retain refinery capacity
May 25, 2017 / 1:05 PM / 7 months ago

UPDATE 1-South Africa wants Sinopec to retain refinery capacity

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CAPE TOWN, May 25 (Reuters) - South Africa is in talks with China’s Sinopec about its takeover of Chevron Corp’s Cape Town refinery as it wants to ensure its production capacity is retained and enhanced, Economic Development Minister Ebrahim Patel said on Thursday.

Sinopec will pay almost $1 billion for a 75 percent stake in Chevron Corp’s South African assets and its subsidiary in Botswana to secure its first major refinery in Africa, the companies announced in March.

“A key concern that government will raise in every major transaction like this is how to retain and expand our industrial capability and includes in this case, refinery capability,” Patel told reporters before his budget vote speech in parliament.

Patel’s ministry oversees competition authorities in Africa’s most industrialised country.

South Africa has a history of taking its time over approving takeovers, partly because competition authorities have a public interest mandate to safeguard jobs in addition to an antitrust mandate to maintain competition.

In 2011, the regulator told U.S. retailer Wal-Mart Stores not to cut jobs for two years following its acquisition of South African retailer Massmart, delaying implementation of the $2.4 billion deal by at least two months.

Last year, Anheuser-Busch InBev said it would invest 1 billion rand ($77.3 million) to support small South African farmers as part of concessions agreed with the government to secure regulatory approval for its $100 billion-plus takeover of SABMiller.

Patel did not go into details of the Sinopec discussions, saying the deal with Chevron would still need to go for formal regulatory scrutiny. ($1 = 12.9335 rand) (Reporting by Wendell Roelf; editing by James Macharia and David Clarke)

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