Johannesburg — SMALL emerging South African gas companies are keen on buying some of the assets being disposed of by major oil companies, according to Reatile Resources chairman Simphiwe Mehlomakulu.

Oil majors BP Africa and Royal Dutch Shell have announced plans to sell some of their downstream assets in certain African countries and this would afford smaller players with access to cash the opportunity to entrench themselves in the market.

"The disposal of the assets presents a wonderful opportunity for a company like Reatile to buy assets that will give it scale and increase its market share," Mr Mehlomakulu said.

As in most southern African countries, the South African downstream market is dominated by major oil companies. The downstream sector of the petroleum industry includes refineries, petroleum product distribution and retail outlets and natural gas distribution companies.

Speaking at a signing ceremony of Reatile's merger with Engen's South African liquefied petroleum (LP) gas business yesterday, Mr Mehlomakulu said Energy Minister Dipuo Peters should ensure that South African companies got a "fair chance" to bid for the assets. He said multinationals did not invest their profits locally. "We are not asking for a hand out. We will buy at market share," he said.

BP Africa earlier this year said it would sell its downstream assets in several southern African countries. Shell has announced the sale of its downstream assets in 21 African countries. Shell also wants to sell Easigas, its LP gas asset in SA. Mr Mehlomakulu would not say if Reatile was vying for Shell's LP gas asset. He said Easigas stood a great chance of being bought by a foreign company.

"Local companies tend to do more for the local industry compared to the multinationals," Mr Mehlomakulu said.

Ms Peters said the government could motivate for the companies to sell to local companies. She said it was preferable for ownership of the sold assets to be kept in the respective African countries. But she warned against "speculators" who bought assets and adopted a "hands- off" attitude. Ms Peters said speculators' tendency to buy and resell assets would counter efforts to transform the industry.

Meanwhile, Engen yesterday launched the first of 10 black-owned service stations, which are a result of an initiative between the company and the National Empowerment Fund.

According to Engen GM for sales and marketing, Vukile Zondani, the initiative seeks to boost black economic empowerment in the petroleum industry. The fund has set aside R50 m for new and existing black dealers to open new stations.

The black entrepreneurs would be required to put down between 10% and 20% of the purchase price and the empowerment fund would finance the rest. Engen would stand surety for half the purchase price and would also cover training and business support costs.

Mr Zondani said the move would see Engen increase its 26% share of the local retail market.