Picture: ISTOCK
Picture: ISTOCK

Petroliam Nasional’s South African unit, Engen, is in talks with Vivo Energy Holding to combine some of their African fuel-retail assets, insiders say.

The deal would be worth as much as R3.5bn ($256m), or about 20% of Engen’s equity value, said the people, who asked not to be identified as the negotiations are continuing.

Engen, which is 26%-owned by South African investment group Phembani and some of its partners, could take a stake in Vivo, which operates stations under the Royal Dutch Shell brand.

Representatives for Vivo and Engen did not respond to phone calls and e-mails requesting comment.

The deal will enable Engen to use the better-known Shell brand, while both companies can generate savings by sharing distribution assets. Engen has operations in 26 sub-Saharan African countries, while Vivo is the Shell licensee in 16.

Engen will retain sole control of its operations in SA, Botswana, Lesotho and Swaziland as well as an oil refinery in SA with the capacity to process 135,000 barrels of oil a day.

Talks are advanced and could be concluded in early 2018. A final decision has not yet been reached and the deal could still be called off.

Reuters

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