China eyes SA oil refinery

2010-09-15 06:43

Cape Town - South Africa's national oil company PetroSA said it held fruitful talks with China's oil group Sinopec and was speaking to other potential investors as it seeks partners for a new $10bn refinery.

Chairperson Linda Makatini said PetroSA was looking to sell up to a 30% equity stake in the planned 400 000 barrels-per-day refinery, which would be among the largest in sub-Saharan Africa and reduce South Africa's reliance on imports.

"We made it clear to the Chinese that whoever comes in, we are looking for a partner throughout the value chain," she told Reuters on Tuesday.

"We are looking for a partner in terms of storage, a partner for trading, exploration as well as (the refinery)."

Makatini said South Africa was also talking to Malaysia's state-owned oil company Petronas and Sonangol of Angola, which rivals Nigeria as Africa's top oil producer.

"We've had discussions with them and identified potential areas of cooperation... So we are also interested in Sonangol partnering with us in all areas," she said.

The final decision on the size of the equity stake that will be sold depends on South Africa's government, Makatini said.

Namibia's state-owned petroleum group NAMCOR said last year it was also offered a 10% to 15% stake in the refinery, which PetroSA said could come on stream by 2016.

Sinopec is increasingly active in exploration across Africa, including in top oil producer Nigeria, as China ramps up investment in Africa's oil and gas sectors to secure supplies to the world's second largest crude buyer.

Makatini said PetroSA's talks with Sinopec raised the possibility of China using South Africa as a launch pad into the rest of the continent.

"They understand the power that we wield within the African continent and I think that we could see synergies of how we could attack some of the upstream issues together," she said.

PetroSA operates one of the world's largest gas-to-liquids refineries at Mossel Bay in South Africa and holds exploration acreage in Gabon, Equatorial Guinea, Egypt, Namibia and Mozambique.

  • andy - 2010-09-15 08:51

    Its amazing that this articles is next to a headline " nationalise the fuel industry ". also amazing that these politicians cannot join the dots in the picture . you cant attract investment if you threaten at the same time to nationalise that same industry you want people to invest in !

  • Francois Smith - 2010-09-15 12:25

    This is an ironic case - why don't the government allow blacks as individuals to participate in such a project to boost BEE. Then the question of whether Petro SA need to build such a white elephant is still unanswered. I think that on a contract of such scale the opportunity for "patriotic dividends" to a few fat cat ANC members and the ANC itself is humangous. Thus we will have Chinese replacing South African workers, Chinese replacing BEE, ANC Corruption, more poor people and the tax payer to foot the bill for something that was not viable in the first place. Great thinking Petro SA! Some of you are probably in line for a nice ministerial job! Or at least a R500k interest free loan from Nkobi. Build us schools rather please and let Sasol look after the fuel.

  • ehday - 2010-09-15 13:09

    Where is Malema on this???? Did the ANC ask him if he approves? Agree with F.Smith. Corruption written all over $10b.

  • COLIN - 2010-09-15 14:38

    Mr Makatini,come down off your self created throne, you are not nearly as powerfull as you think in Africa

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