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Radebe: Invest in energy if you want other investments to survive

Nov 06 2018 20:08
Khulekani Magubane, Fin24

Energy Minister Jeff Radebe told delegates at the Oil and Gas Week Conference on Tuesday that his department was looking forward to directing "very critical" investment into oil and gas development in the coming years.

Speaking at the conference in Cape Town's V&A Waterfront – on the back of a series of fuel price hikes – Radebe said President Cyril Ramaphosa's investment drive prompted several corporate entities to commit to investing in SA's economy.

However, he added, this meant more energy would be needed to sustain these investments.

Wanted: investment in energy

"We expect this investment initiative to attract partners in the oil and gas sector, as we will need more energy to sustain the investments announced, particularly in the mining sector," Radebe said. 

He called on the oil and gas energy sub-sectors for investment.

"We are optimistic that at the end of this conference we will convince a number of oil and gas investors that South Africa, and indeed the rest of this continent, is ready for investment – not only in production, but also in refining power producing infrastructure," said Radebe. 

Radebe also suggested that investment in the energy sector could help SA manage costs.

He cited the updated Integrated Resource Plan (IRP), which envisages a gas to power programme incorporating liquefied natural gas imports, as well as imports through pipelines. 

"With a growing use of vehicles on our continent, the availability of affordable refined petroleum products becomes very critical. 

"This will require collaboration between crude oil-producing countries and those with the necessary refining capacity," he said. 

Local infrastructure

South Africa’s energy sector needed to confront its need to balance oil exploration and production facilities with investment in refining capacity, he added. 

"The lack of world-class refining infrastructure continues to deny Africa the ability to benefit from the upside of their resource endowment. 

"Importation of refined products drains foreign currency reserves in many of our countries and revenues obtained from the proceeds of exploration are used to purchase petroleum products," said Radebe. 

The minister has previously said the only way SA could have full control of its fuel prices, rather than being at the mercy of international brent crude prices, would be to develop its own refinery capacity and resources.

In September, Mineral Resources Minister Gwede Mantashe withdrew the Mineral and Petroleum Resources Development Amendment Bill from Parliament with a view to formulating legislation specifically directed at the oil and gas sectors.

Radebe said the department looked forward to partnerships with other countries in the energy sector, including the completion of the mega refinery in Nigeria, aimed at improving intra African trade in refined petroleum products. 

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