Petronas considers bids for its controlling stake in Engen

Malaysian state energy company Petroliam Nasional has revived a sale of Engen, South Africa’s largest gas station chain, people familiar with the matter said.

According to the people, Petronas is working with advisers to solicit bids for its controlling stake in the fuel retail business, which could fetch about $2 billion.

It’s attracting interest from suitors, including oil trading giants Trafigura Group and Vitol Group, the people said, asking not to be identified because the information is private.

Petronas has been exploring options for its 74% stake in Engen on and off for some years, though the process appears to be gaining fresh momentum. The people said the Malaysian firm is now inviting bidders to make second-round offers.

Deliberations are ongoing, and the people said there’s no certainty that the suitors will proceed with binding offers. A spokesperson for Trafigura declined to comment. Representatives for Engen and Vitol didn’t immediately respond to requests for comment.

“As part of good business governance and conduct, Petronas continuously reviews its portfolio,” the Malaysian company said in an emailed statement.

“Petronas values Engen as an important part of its global business. Our priority for Engen is to ensure business continuity to allow it to sustain and grow.”

According to Bloomberg News, Engen’s second-largest shareholder, South African investment firm Phemani, has also been considering reducing its 26% stake. Phemani was founded by the former MTN Group.

Chief Executive Officer Phuthuma Nhleko has approached potential buyers, including Royal Bafokeng Holdings, who know the matter at the time.

Engen, the operator of South Africa’s largest chain of gas stations, had R43.2 billion of total assets at the end of last year. The firm, whose history stretches back to 1881, owns 1,280 service stations across seven countries, according to its website.