While most multinational oil companies are trying to cut costs in the face of oversupplied oil and falling prices, Puma Energy — an international fuel distributor owned by Angola’s state oil company Sonangol Holdings and Netherlands-based global commodity traders Trafigura — is buying storage capacity in Southern Africa.

Chevron announced in January that it is selling 75 percent of its operations in South Africa including storage, triggering questions of a possible bid by Singapore-based Puma, BusinessDayLive reported.

Chevron has already disposed of some assets in Nigeria, Africa’s top crude exporter, as oil companies globally look to cut costs and streamline business, Reutersreported in January. Chevron is a leading refiner and marketer of petroleum products in South Africa, where it has had a presence for more than a century.

Puma chief operating officer Africa Christophe Zyde said Monday that Puma is targeting organic growth and acquisitions in South Africa to match its expanding energy storage capacity in Southern Africa.

The company has grown fast in Africa but its foothold is still small in South Africa. Five years ago it had a presence in five countries on the continent; now it is in 19. The biggest obstacle to growth has been attracting and retaining the right skills, Zyde said.

Puma’s expansion contrasts with other multinational oil companies that are contracting business, trying to cut capital and operating costs as oil prices fell to a low of $27 a barrel in January. Chevron Global said was inviting bids for 75 percent of its operations in South Africa including refining, storage and retail through the Caltex brand, BusinessDayLive reported.

Despite plummeting oil prices, local investors such as Sonangol have seen opportunities to buy assets from international oil majors’ divestments, FTSEGlobalMarkets reported. For example, Sonangol acquired U.S. company Cobalt International Energy-owned blocks worth $1.8 billion, and several acquisitions of Nigerian Oil Mining Licenses by local players Seplat Petroleum Development and Eroton E&P from Chevron and Shell.

Zyde declined to say whether Puma Energy was bidding for Chevron’s South African business, BusinessDayLive reported.

In 2015 Puma Energy bought Drakensberg Oil and 74.9 percent of Brent Oil, which owns storage, logistics facilities and branded fuel stations, according to BusinessDayLive.

The merger with Brent gave Puma less than a 5 percent share of South Africa’s wholesale market for petrol and diesel, according to a Competition Commission investigation.

Puma’s position is still relatively small in South Africa and it intends to grow through small and large acquisitions if the price is right, he said.

Its total storage capacity for the Southern African Development Community region is 275.5-million liters. Puma has 123 retail sites in South Africa including Brent, which it’s rebranding.

Puma’s preferred model is storage and distribution, not refining, Zyde said. The company has been investing in oil storage, with a 110-million liter terminal at Matolato serve Southern Africa and a 46-million-liter terminal being built by Island View Storage at Richards Bay, which Puma will lease.

South Africa is attractive because it’s well regulated, well administered, and a large market for fuel, Zyde said. Availability of locally refined product has not kept pace as the country’s clean fuel imports increased. Puma Energy has been searching for a while for the right opportunities to enter South Africa, he said.

Source: AFK Insider