Chevron to sell 75% of South Africa business

CHEVRON is planning to sell 75% of its South African business unit, which includes its 110,000 bbl/d refinery in Cape Town, according to reports.

Reuters reports that the disposal is part of an ongoing asset sales programme, and Chevron has asked for “expressions of interest”. The business also includes a lubricants manufacturing plant, laboratory and blending plant in Durban and a network of service stations under the Caltex brand. The company has operated in South Africa for more than 100 years.

“This demonstrates Chevron's continuing focus on balancing our global portfolio with our long-term business priorities, and it is aligned with our previously announced US$15bn divestment programme,” Chevron president for international products Mark Nelson told Reuters.

At the end of 2016. Chevron announced plans to cut its capital investment in 2016 by 24% compared to 2015, driven by the continued low oil prices. Analyst Brian Youngberg of Edward Jones told Bloomberg that it is a “sign of the times” that companies are having to rationalise their businesses and exit locations where there was limited potential in the current lower price trading environment.

Chevron has pushed ahead with a series of divestments in the past 18 months. In June 2015 it sold its stake in the New Zealand Oil Refining Company and in March 2015 sold its 50% stake in Caltex Australia. It has also sold several assets in Nigeria.