May 27, 2024 [IOL]- The state-owned Central Energy Fund has bought the Sapref Refinery just south of eThekwini, South Africa’s biggest fuel refinery, from bp Southern Africa and Shell Downstream South Africa (SDSA), for an undisclosed sum, a spokesperson said Saturday.
Sapref, which has been shut temporarily since the end of March 2022, has continued to service SDSA and bpSA market fuels requirements via imported fuels. Shell announced earlier this month it planned to divest all its businesses in South Africa following a comprehensive review of its businesses across all regions.
According to a statement released on Saturday, bp Southern Africa (bpSA) and Shell Downstream South Africa (SDSA) had reached an agreement for the sale of their 50% ownership assets located at the Sapref Refinery Precinct to the Central Energy Fund SOC (CEF).
The sale includes the SDSA and bpSA interests in the Sapref land and other associated assets, which includes tanks, process units, pipelines to and from Sapref, to Island View terminal, and the Single Buoy Mooring for crude imports.
Forty-eight permanent employees of Sapref who work at the refinery site together with 16 trainees will transfer with the business.
The sale excludes Sapref (PTY) LTD, bpSA’s marketing businesses, the Island View terminal Operations and the lubricants blending and grease manufacturer, Blendcor.
BPSA CEO Taelo Mojapelo said they viewed the agreement as a positive outcome for bpSA, for South Africa’s fuel industry and for the country as a whole.
Mojapelo said continued ownership of Sapref did not fit with bp’s global strategy.
“Finding a buyer committed to the future of the refinery was an important consideration for us – we believe CEF is well-placed to take Sapref forward,” Mojapelo said.
Sapref was commissioned in 1963 as a 50:50 joint venture between bpSA and SDSA. At its peak the refinery carried a 180 000 barrels per day capacity.
Sapref (Pty) LTD manages the Single Buoy Mooring (SBM) on behalf of the oil companies that own it. With both the Engen and Sapref refineries not operating, the SBM still supplies crude imports to Sasol Mining-owned Natref in Gauteng.
BP has operated in South Africa for 100 years, pursuing a range of interests from oil and gas exploration, crude oil importation and refining to the distribution and marketing of gas and refined products through the bp retail and wholesale business, bp Marine and Castrol.
Shell’s divestment includes its aviation, marine, construction and road, trading and supply, commercial fuels, and lubricant operations. The company has about 600 service stations across South Africa.
Last year’s a controlling stake in Engen Ltd., South Africa’s largest gas station chain, was sold to a unit of trading house Vitol Group by Malaysia’s Petronas.
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