Sasol Oil, Exel Petroleum plan merger

South African petrochemical company Sasol Ltd. and British freight and logistics firm Exel Petroleum Oct. 1 applied to London's Competition Commission for approval to merge their liquid fuels businesses.

Oct. 6, 2003

2 min read

By OGJ editors

HOUSTON, Oct. 6 -- South African petrochemical company Sasol Ltd. and British freight and logistics firm Exel Petroleum Oct. 1 applied to London's Competition Commission for approval to merge their liquid fuels businesses.

If approved, the newly formed company, Sasol Liquid Fuels Business (LFB), will incorporate the liquid fuels interests of both firms. The commission's response is expected by yearend, Sasol said.

LFB will cover the "entire value chain" starting with crude oil procurement for Sasol's 64% stake in National Petroleum Refiners (Pty.) Ltd.'s refinery at Sasolburg, South Africa, and receiving blending components from the Synfuels refinery at Secunda, South Africa, Sasol said.

Sasol said it has worked closely with Exel since it was established in 1997. "Sasol gains a proven empowerment partner, a partner we know well and admire," said Sasol Chief Executive Pieter Cox.

Exel Chairman Jomo Sono said, "We have a secure supply of product from the industry leader. We will have greater access to capital and technology for future expansion—and the prospect of a meaningful share of [South Africa's] biggest and most competitive fuel company."

Cox added that the newly formed LFB will "straddle the industry's production and distribution chain and will be able to effectively complete with the other multinational oil companies based in South Africa."

Exel held a 3.7% share of South Africa's gasoline market and 7% share of its diesel market as of June, Sasol said. In addition, the company owns and operates 189 retail outlets in the country.