Page 6 - AfrOil Week 43 2021

AfrOil INVESTMENT AfrOil

CEF considers buying Sapref

SOUTH AFRICA SOUTH Africa’s state-owned Central Energy remaining functional refineries.
Fund (CEF) is reported to be considering buy- Meanwhile, in August, local firm Sasol and
ing the South African Petroleum Refineries its French JV partner TotalEnergies revealed
(Sapref) joint venture (JV) refinery run by BP they were discussing whether to close or sell the
and Royal Dutch Shell. Natref facility.
Speaking to Bloomberg, sources said that Following internal assessments, the partners
the CEF is keen to purchase the 180,000 barrel have decided that making alternations to the
per day (bpd) facility in Durban, as South Afri- 107,000 bpd facility to comply with CF2 legis-
ca’s refineries face a September 2023 deadline lation is not viable. Sasol’s chief financial officer
to reduce emissions. Sapref produces gasoline, Paul Viktor said that current margins mean that
diesel, marine fuel, bitumen, base oils and par- the required investment to make Natref comply
affin waxes. One of the sources said that green with CF2 would be “sub-economical.”
financing could be used to pay for upgrades to He said that converting Natref would be
process cleaner fuels. much more costly than the conversion of the
Last month the government implemented 160,000 bpd Secunda coal-to-liquids (CTL)
its Clean Fuels 2 (CF2) legislation, under which refinery, which is expected to cost $400mn.
the new Petroleum Products Specifications and Sasol owns a 63% share of Natref, with TotalEn-
Standards mandate the use of ultra-low-sulphur ergies holding the remainder.
gasoline and diesel products from September Viktor said that embarking on such a pro-
2023. gramme “is not going to happen. We are not
The South African Petroleum Industry going to put that money in at that quantum,
Association (SAPIA) has warned that the new only to not make a return on it,” he added. CF2
legislation could make the country’s remaining is equivalent to Euro 5. ™
refineries obsolete within two years without
financial support. SAPIA has been working with
the government to find a resolution to issues
with funding the upgrade of six refineries in the
country to allow them to produce cleaner fuels.
It warned in January that refiners would be
unlikely to carry out nearly $4bn worth of com-
bined overhaul work without government sup-
port or permission to raise fuel prices.
Following the announcement in April
by Engen Petroleum, a subsidiary of Malay-
sia’s state-owned Petronas, that it would turn
120,000 bpd refinery, also in Durban, into an
import terminal following years of losses and a
fire, Sapref, Sasol’s 160,000 bpd Secunda coal-
to-liquids (CTL) plant and the 107,000 bpd
National Petroleum Refiners of South Africa
(Natref) unit in Sasolburg are the country’s only The 180,000 bpd refinery is run jointly by BP and Shell (Image: Sapref)

Kenya set to cancel six oil contracts

KENYA KENYA’S government has announced its inten- A-Z Petroleum for L1A and L3, Milio/Castac for
tion to cancel six international firms’ contracts L20 and Lamu Oil for L14.
for failure to meet their obligations with respect John Munyes, the cabinet secretary of the
to exploring for crude oil and natural gas. ministry, issued demand notices and notices of
The Ministry of Energy and Petroleum issued termination of these firms’ production-sharing
cancellation notices to Zarara Oil and Gas Ltd, contracts (PSCs) in the Kenya Gazette on Sep-
Octant Energy, Simba Africa Rift Energy Ltd, tember 10, 2021. He did so in line with the pro-
A-Z Petroleum Products Ltd, Milio/Castac Oil visions of Kenya’s Petroleum Act, which allows
Ltd and Lamu Oil and Gas Ltd. Zarara Oil holds the Petroleum and Mining Ministry’s cabinet
exploration rights for blocks L4 and L13, Octant secretary to terminate contracts after giving
Energy for L17 and L18, Simba Africa for 2A, contractors written notice.

P6 www. NEWSBASE .com Week 43 27•October•2021