BP, Shell take on PetroSA refinery plan

2011-01-18 15:17

Johannesburg - PetroSA is likely to come under pressure to abandon a refinery project in the Eastern Cape if lobbying by BP and Shell succeed.

On Tuesday Business Report and Bloomberg reported that BP and Shell have proposed that South Africa buy a stake in their Sapref refinery, which is SA's largest.

The reports said the proposal would be discussed further next month at a meeting with Energy Minister Dipuo Peters.

“It’s true that it is one of the proposals on the table,” Joe Mahlo, BP’s South African spokesperson, told Bloomberg.

PetroSA's plan to build a refinery bigger than Sapref at the Coega industrial zone outside Port Elizabeth has already been criticised by BP.

On Tuesday PetroSA spokesperson Thabo Mabaso said it had no knowledge of the proposal to the government from BP and Shell.

"All we know is what has been reported in the press," he said.

Mabaso said that the proposal should have no effect on PetroSA's refinery plan.

"Our plans are going forward and we are working on a financing model," he said.

The refinery is scheduled to become operational in 2016. The estimated cost will be between $9bn and $10bn and will produce 360 000 barrels of refined products per day.

Petro SA has a refinery in Mossel Bay that produces around 36 000 barrels per day and Mabaso said the company was continuing with its offshore explorations.


  • martin albert - 2011-01-18 15:26

    This is rich coming from 2 private companies that expatriate all the profits out of SA, with no disclosure. They already make obscene profits that would blow Joe Public's mind away if they only knew the facts.

  • @martin - 2011-01-18 15:55

    Well we have SASOL who rip us off locally. Why do SASOL products cost the same as imported ones which have to travel across the world to get here? Furthermore I'm sure we still pay a levy on fuel for SASOL which was supposed to end 20 years ago!

  • GBES - 2011-01-18 16:29

    FRom a taxpayers viewpoint,this sounds like a good proposal.Governments can kickstart big concerns,but they fail dismally in running it profitably.We have excellent refineries,and govt should think about saving that tax money,and spend it on the poor & infrastructure.

  • Sir Lay Man - 2011-01-19 08:42

    Who's gona fork out the bill of U$10bn?..If Bp and Shell can share a Refinery, why can't PetroSA think about investing a fraxtion of this U$10bn and upgrade the Sapref Refinery and go on board as the 3rd shareholder @ SAPREF. The other U$9bn can go to housing etc for the SA Citizen.

  • Gareth - 2011-01-19 09:37

    They cant run a refinery with a production of 36 000 barrels/day yet they want to build one with a production of 360 000 barrels/day? I wonder...

  • Aluta - 2011-01-25 14:57

    There's nothing good about this Proposal from BP and Shell (they are only serving their masters in the UK, US and everywhere,except the SA citizen), if you knew how much government would have to invest in SAPREF to meet euro standards, etc. You'd think again. Secondly, the PetroSA project in Coega is about the poor & infrastructure development. it is the poor that will benefit from skills development, decent jobs & smme development brought about by Project Mthombo...and yes as Taxpayers, we will pay for it, as much as we pay for everything else!! The notion that everything must be run profitably is unfortunately misleading in the developmental context....for any business, it takes time to breakeven, payback research costs, infrastructure investment, etc...You can't put profit as basis for development! Wake up Mzansi!

  • Ed - 2011-02-08 10:27

    I say boycott Shell and BP... the Eastern Cape desperately needs this development. Not only will it create over 10000 jobs during construction, but will create over 1000 full-time jobs once completed. The other service industries that will mushroom in the EC as a result of this development will lead to over 8000 further jobs being created. This development will pay for itself int ime with the taxes that will be created from it, as well as the increase in skills in an unskilled area, creation of wealth in a disadvantaged area and help to provide a spark to an area that needs it. It will also lead to less rliance on BP and Shell and as Martin Alberts says, ensure that more of the profits remain in SA...making the scheme self-funding.

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