Johannesburg — PETROLEUM retailer Engen is on the verge of buying Chevron's downstream assets in seven sub-Saharan Africa and Indian Ocean Island countries, the company said yesterday.

The acquisitions - comprising downstream companies in Zambia, Malawi, Tanzania, Mauritius, Reunion and Zimbabwe - will give Engen additional sales of about 500-million litres of fuel a year from an additional 120 retail sites in the countries.

"It is the biggest transaction we have done," Engen special projects GM Andrew Bryce said yesterday.

The downstream oil market includes the refining of crude oil, and the sales and distribution of natural gas and refined product.

The deal also boosts Engen's presence outside SA and takes the company a step closer to realising its objective to become one of the biggest energy companies in sub-Saharan Africa by 2016.

Engen recently made a series of acquisitions in several African countries. The company's growth ambitions were aided by several major oil companies deciding to divest from the downstream market in a number of African countries.

Engen MD and CEO Nizam Salleh yesterday said the deal was in line with the company's growth objectives. Engen said it had signed share-purchase agreements for Chevron's assets.

Mr Bryce said Engen and Chevron had agreed commercial terms for the sale, but the transaction was subject to regulatory approval.

These included approvals by reserve banks, competition authorities and energy authorities of the countries. "We are confident that we will get these approvals," he said.

The Zimbabwean government earlier this year blocked Engen's plans to buy BP's assets in Zimbabwe, saying the transaction contravened that country' s indigenisation laws.

"Zimbabwe's indigenisation law has moved on since the (BP) deal fell through. We have made a proposal that complies with the indigenisation law," Mr Bryce said.

Chevron has been selling some of its downstream assets as part of the company's "global re-evaluation and restructuring". Other major oil companies Royal Dutch Shell and BP have also put some of their assets on sale in order to concentrate on the more lucrative upstream sector.

"The deal reflects Chevron's global strategy to run a less complex and more highly focused downstream organisation. The sales are expected to close once regulatory and government approvals have been received," Chevron said in a statement yesterday.

Chevron said the deal would not affect its assets in SA, Botswana, Namibia and Swaziland.

In SA, Chevron trades under the Caltex brand.

"Chevron remains committed to SA and we will continue to market our brands and supply our business partners with the products and services they have come to expect from us," Chevron SA chairman, James Seutloadi, said yesterday.