Cape Town (Platts)--24Nov2009/656 am EST/1156 GMT

  

    Cape Town-headquartered Engen Tuesday said it has not been informed by
the Zimbabwean authorities that its proposal to buy Shell and BP's downstream
assets in the country have been rejected.

     "We have not been informed by the Zimbabwean authorities that our
proposals in respect to compliance with their requirements, have been
rejected," Engen spokeswoman Tania Landsberg said.

     One of South Africa's leading petroleum products retailers, Engen and
east African KenolKobil announced in September a plan to acquire all of BP and
Shell's assets in Zimbabwe.

     But local oil companies and employees have fiercely opposed the
conclusion of the deal. They accuse foreign investors of failing to respect
provisions of the indigenization and economic empowerment act which clearly
spell out that the disposal of any company should constitute a 51% local
component.

     Landsberg said that a detailed proposal was submitted on November 12 to
the minister for youth development indigenization & empowerment and copied to
a number of other ministers and authorities in Zimbabwe.

     The proposal, she said, followed high level meetings with a number of
ministers and the prime minister and senior executives of BP, Engen and
KenolKobil in the previous weeks and days.

     "Engen believes that the proposals are positive and in accordance with
the desires expressed by the various ministers and officials with whom the
matter was discussed," she said. "No response to this proposal has been
received."

     BP and Shell, whose joint Zimbabwe operations employ about 400 people,
run a network of 75 service stations and bulk storage facilities including a
Harare blending plant with a capacity of 30 million liters/year of fuel.

     The snag in the deal comes weeks after reports in South Africa said
Zimbabwe plans to force foreign companies to sell 51% of their shares to
locals within 60 days of publication of a set of new empowerment regulations.

     The reports said that the government will target foreign companies valued
at $500,000 and above.

     The unity government between opposition leader Morgan Tsvangirai with
bitter rival President Robert Mugabe had brought hope Zimbabwe would turn
around the country's economic collapse and encourage foreign investment. 
--Jacinta Moran, jacinta_moran@platts.com

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