Oct. 6 (UPI) -- Anglo-Swiss multinational Glencore said Friday it was looking to spend close to $1 billion to buy most of U.S. supermajor Chevron's assets in South Africa.
Glencore said it was looking to take a 75 percent stake in Chevron's subsidiary in South Africa, and all of Chevron's unit in Botswana. Combined, Glencore put the value of the deals at $973 million.
"Glencore believes that the assets provide an attractive downstream opportunity for its oil business," the company said in a statement. "The acquisition will include undertakings as to retention of the local management team and workforce."
A minerals-focused company, Glencore has made strides into the energy sector given the overall improvement in commodity prices. In late September, the company signed a multi-year agreement with a liquefied natural gas company in Angola for cargo for various global destinations. The company said at the time the opportunity bolstered its efforts to expand its portfolio.
Glencore cautioned, however, that spending on oil and natural gas may be limited over the next year.
"Glencore intends to manage its overall oil asset portfolio to ensure that, including this transaction, net additional capital investment is limited to less than $500 million over the next 12 months, consistent with Glencore's conservative financial framework targets," it said.
For Chevron, the agreement is just one of the latest in a string of divestments. Last month, French energy company Total said it was able to "capture" more opportunities in the Gulf of Mexico through an agreement with the company. Total through the deal said it was expanding its footprint in deep U.S. waters by gaining between 25 percent and 40 percent participation in the prospects in question.
That agreement followed a notification from rig company Transocean that Chevron terminated a contract for deep-sea drilling in the Gulf of Mexico about a year early. Chevron, meanwhile, pegged its exploration and production budget for 2017 at $20 billion, 15 percent lower than last year and 42 percent below 2015 levels.
In a ranking by S&P Global Platts of top financial performers, Chevron was ranked 121, down 104 spots from last year.