Chevron Corporation headquarters in San Ramon

Global commodity trader and miner Glencore’s Black Economic Empowerment (BEE) partner Off The Shelf Investments (OTS) has completed the $973m acquisition of Chevron’s downstream assets in South Africa.

The transaction is being funded by Glencore and comes after South Africa’s Competition Tribunal gave a conditional approval earlier this month.

Already owning a 23% stake in Chevron South Africa (CSA), OTS will now hold a 98% interest, with the remaining 2% to be held by employees.

The deal comes after Chinese state-owned firm Sinopec agreed to acquire a 75% stake in CSA last year. OTS used its ‘first right of refusal’ to acquire the assets.

“The birth of Astron Energy, a proudly South African company, is a significant milestone in the transformation and localisation of the energy sector.”

The acquisition includes a 100,000b/d refinery in Cape Town, a lubricants plant in Durban, and 850 service stations and storage facilities. The transaction also gives OTS a 100% stake in Chevron Botswana.

Under the terms of the deal, OTS has committed to invest R6bn ($500m) to develop the Cape Town refinery. Hereafter, CSA will be called as Astron Energy.

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OTS chairperson Mashudu Ramano was quoted by www.iol.co.za as saying: “The birth of Astron Energy, a proudly South African company, is a significant milestone in the transformation and localisation of the energy sector.

“CSA will retain the right to use the Caltex brand, which has been in operation for over 100 years and grown to become a household name across the region, for a period of up to six years.”

OTS intends to exercise its option to repay the funding secured from Glencore and retain its shareholding, Ramano said.

He further noted that Glencore has the option to buy the shares.