The acquisition of South African oil company Engen by global commodities trader Vitol is expected to contribute R100 billion to South African oil refineries over the next five years, announced the country’s Trade and Industry Minister Ebrahim Patel.
The acquisition will facilitate the establishment of a company overseeing more than 3,900 service stations and exceeding two billion liters of storage capacity across 27 African nations.
“Engen will continue to buy fuel that is refined in South Africa from Aestron refinery in Milnerton in Cape Town for a period of 15 years and from Sasol refinery in Secunda and the Sasolburg one for a period of up to 10 years and this commitment has been estimated to be worth about R100 billion in petroleum turnover over the next five years,” said Minister Patel during a ceremony in Parliament.
Minister Patel highlighted the positive implications for job security and local procurement, emphasizing that the agreement not only entails an increased stake for the Black Economic Empowerment partner but also signifies the ownership of an additional 20 service stations by black South Africans. He added that the acquisition is tangible demonstration of investor confidence in South Africa’s economic prospects.
Meanwhile, Vivo Energy is set to inject an initial R10 billion into its South African operations post-merger with Engen. Engen, a fuel distributor with over a thousand service stations nationwide, will maintain its name under Vivo Energy. Vivo is also considering an additional investment of R4 billion, contingent upon feasibility studies, in endeavors such as biofuels production and marine infrastructure.