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Saudi Arabia may build new oil refinery in SA - Radebe

May 02 2019 13:45
Melanie Gosling, Fin24

South Africa is in discussions with Saudi Arabia about building a new oil refinery in the country, Energy Minister Jeff Radebe said on Thursday. 

"Oil refineries are ageing in this country and are unable to meet requirements. We are in need of new infrastructure to meet the increasing demand for petrol and diesel.

"We are in discussions with countries that produce oil to look at additional refineries in South Africa," Radebe said in his welcome address at the 4thIEF OFID Symposium on Energy Poverty in Cape Town.

Talks with Saudi Arabia

Radebe specified in a brief interview later that he was in discussions with Saudi Arabia to build a refinery here. 

"We’ve not decided where it will be yet, but there are several sites available," he said. 

Radebe told delegates the final version of the long-awaited Integrated Resource Plan (IRP) would be presented to Cabinet next month. The draft, which has incorporated public comment submitted in October, is still being processed with the National Economic Development and Labour Council (Nedlac).

"The IRP will be released in the near future," he said. 

Radebe told delegates his department would be bringing in more electricity from private producers in future through the department’s bidding, or auction, process. He referred to the success of the department’s Renewable Energy Independent Power Producers’ Procurement Programme (REIPPPP), which he said had brought $40bn in direct foreign investment into South Africa. 

"REIPPPP is fully funded by the private sector. It is intended that there will be more bids which we will be announcing in the future," he told delegates. 

Avoiding 'ghost towns'

Radebe said most African countries realised the need to make an energy transition away from old to new ways of producing and consuming energy. "But it must be a just transition so we avoid unintended consequences of jobs losses and ghost towns," Radebe said. 

One of the UN Sustainable Development Goals was to ensure universal access to reliable, sustainable, modern energy for all by 2030, he noted. "One of the challenges is the paucity of energy data. Energy poverty can be addressed only by closing the energy data gaps, because without that it becomes very difficult for us to plan for energy sustainability…The need for high quality data cannot be over-emphasised," Radebe said. 

Bleak picture

While Radebe said 87% of South Africans had access to modern forms of energy, other speakers sketched a bleak picture of energy availability to the population in Africa. It was not from lack of resources, delegates heard, as Africa was rich in fossil fuels and in renewable energy resources, yet most people had no access to electricity. 

Belkacem Ouzrourou, director of the Africa Region of OFID, said two-thirds of the population in sub-Saharan Africa did not have access to electricity but relied mainly on wood. 

"Energy access is key for overcoming poverty and providing basic services like health care, education and water," he said. 

Mahaman Laouan Gaya, the secretary-general for the African Petroleum Producers’ Organisation, said in large parts of the continent traditional sources of energy were still animals – camels, horses and cattle – or human energy. 

"Traditional energy sources, animal or human, are still essential to cultivate fields, crush cereals and draw and transport water. African women spend 10 to 12 hours a day to achieve this," Gaya said. 

Despite the abundance of oil, gas, coal and a surplus of wind, solar, geothermal and hydropower, the paradox was that most people still did not have electricity. 

Gaya said in Africa each person consumed 0.6 tons of oil equivalent (TOE), compared to 4 TOE per capita in Europe and 7.8 TOE in the US. 

"And if you exclude South Africa and north Africa, is it between 0.3 to 0.4 TOE. In sub-Saharan Africa wood is still used for 60% of energy needs," Gaya said. He said Africa consumed twice as much energy as Europe to produce one dollar. 

"I doubt very much that an economy can emerge on the energy of biomass – wood and straw mostly – or with an average per capita consumption of 0.4 TOE," Gaya said.   

jeff radebe  |  saudi arabia  |  renewables  |  oil
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