Page 5 - Downstream Monitor - MEA Week 28

DMEA Commentary DMEA
investment, which was a core condition set by the government from the start of the protracted sale process.
state involvement
Pretoria’s refusal to fund the upgrades to exist- ing re neries necessary to comply with impend- ing new cleaner fuels regulations was among Chevron’s complaints ahead of the divestment decision.
however, the remaining re nery operators appear to be becoming reconciled to the need to nance the work without state aid. e UK’s BP unveiled plans in November to invest ZAR3-4bn ($208-277mn) in an overhaul of the 180,000 bpd SAPREF facility near Durban, which is owned in 50:50 joint venture (JV) with Royal Dutch Shell.
Meanwhile, major local player Sasol remains intent on investing ZAR14bn ($970mn) to improve standards at the 108,000 bpd Natref re nery near Sasolburg and at the 150,000 bpd Secunda Synfuels Operations. these moves come ahead of new regulations that will be
implemented in the early 2020s.
e country’s fourth oil re nery is a 120,000
bpd plant located on the east coast near SAPREF, which is owned by Engen Petroleum, a subsidi- ary of Malaysia’s state-owned Petronas.
e announcement of progress on the Aram- co-backed plans highlights the lack of movement Pretoria has made on other re ning ventures.
Plans to develop a 300,000 bpd new re nery at Coega were on the table for more than a dec- ade and had long been envisaged being executed by CEF subsidiary PetroSA, before the latter rm’s nancial di culties rendered the outlay unfeasible.
Meanwhile, the move ts well within Ara- mco’s ongoing programme of expanding its re ning and petrochemical capacity overseas, following agreements to build those of the same size in Malaysia, China and Pakistan. Like these units, Aramco’s deal will no doubt include a pro- vision that the Saudi rm supplies feedstock, a key element of its strategy to ensure market share amid growing competition.™
Port of Richards Bay Image: Africa Ports
Week 28 17•July•2019 w w w . N E W S B A S E . c o m
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