Page 17 - DMEA Week 28 2021

DMEA NEWS IN BRIEF DMEA

POLICY on which it will construct a 25,000 b/d refineries are offline, leaving it very dependent
modular refinery, according to regulatory on imports for its fuel needs.
UAE settles with OPEC, filings. widescale protests, which began in Zuma’s
The jailing of Zuma on July 8, led to
The deal between the companies was
agrees to Saudi output disclosed on the NASDAQ stock exchange home province of KwaZulu-Natal and has
and the US Securities and Exchange
now spread to other regions.
proposal Commission on July 9. in and out of KwaZulu-Natal, and there
This unrest has disrupted supply routes
The refinery is intended to produce IMO
The United Arab Emirates has resolved compliant, very low sulfur fuel oil, and will be are concerns that fuel shortages might be
its standoff with OPEC+ and reached a located near the Port of Fujairah, Brooge said. imminent, according to sources.
compromise deal that will give it a new output Blue Ocean Energy will be responsible for In a letter to clients dated July 13, Sapref
quota, said a delegate. building the refinery and financing the cost of said it had to make the difficult decision to
The cartel will set a new date for a meeting construction. Brooge will then be responsible shut down the plant and declare force majeure
soon, the delegate said, asking not to be for operating the refinery, earning revenue due to “to the civil unrest in the country and
named because the information was private. from tolling fees on a take-or-pay basis. The disruption of supply routes in and out of
Last week, the Organization of Petroleum deal between the two firms includes a tolling Kwazulu-Natal.”
Exporting Countries and its allies were contract of 20 years, consisting of a five-year The 175,200 b/d refinery, operated by Shell
forced to abandon a tentative deal to boost oil contract to commence upon completion of the SA Refining and BP Southern Africa, had only
production because of last minute objections construction of the refinery, and three renewal just restarted a few weeks ago after a month-
from the UAE. If the compromise is ratified periods of five years each, Brooge said. long maintenance. The refinery is a key
at a new meeting, it could potentially open “The modular refinery will be focused on exporter of bunker fuel, fuel oil feedstocks,
the way to higher output, although some producing VLSFO and will be fully compliant bitumen and base oils.
members have already locked in most of their with the new IMO 2020 very low sulphur A spokesman at Sapref was unavailable for
supply volumes for August. rule,” Nicolaas Paardenkooper, CEO of Brooge comment.
The UAE has agreed on a new baseline of Energy, said. “With the UAE adding to its Fuel imports in South Africa are likely
3.65 million barrels a day for its production oil production capacity, which we anticipate to continue at elevated levels as the country
cuts, the delegate said, an increase from will drive demand for refining services for grapples with a collapse in its refining
about 3.17 million currently. The country will both the domestic and export market, we capacity.
now support a proposal from Saudi Arabia believe this is an opportune time to enter this South Africa has imported around 317,000
to extend the duration of the OPEC+ cuts segment of the oil industry.” b/d of refined products so far in 2021,
agreement to December 2022, the delegate Blue Ocean Energy FZE could not according to estimates from data intelligence
said. immediately be reached for comment. firm Kpler. This is the highest in almost
BLOOMBERG S&P PLATTS a decade, according to S&P Global Platts
estimates. This compares with 191,000 b/d
SAPREF declares force and 173,000 b/d in 2020 and 2019 respectively,
REFINING Kpler data showed.
South Africa, a net importer of transport
Brooge Energy leases majeure on civil unrest fuels, has ramped up its intake of diesel and
South Africa’s largest refinery Sapref has shut
gasoline, with almost half the country’s total
Fujairah refinery project to down due to social unrest caused by the arrest refining of 510,000 b/d offline due to recent
of former President Jacob Zuma, pushing the
refinery hitches.
Blue Ocean refiner to declare majeure on the supply of all and Astron Energy’s 110,000 b/d Cape Town
The 125,000 b/d Engen refinery in Durban
oil products, sources close to the matter said
Brooge Energy Ltd. has signed an agreement on July 14. refinery remain offline.
to sublease land to Blue Ocean Energy FZE, This means three out of the country’s five The Engen refinery will be converted into

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