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Almost half of SA’s oil refining seen shut until 2022

Would force heavy reliance on fuel imports.
Firefighters dousing the fire at the Engen oil refinery in Durban, in December 2020. Image: Getty Images

South African plants owned by Glencore Plc and Petroliam Nasional Bhd that make up 43% of the nation’s oil-refining capacity are expected to stay shut until at least 2022, according to energy consultant Citac.

Astron Energy, a unit of Glencore, has yet to restart the 100 000 barrel-a-day Cape Town refinery after a deadly explosion and fire in July. Petronas unit Engen’s Durban plant also stopped production in December after a fire.

The closures will force South Africa to rely heavily on fuel imports. All four of South Africa’s oil refineries – with a total capacity of more than 500 000 barrels a day – have had accidents or are under review, with the industry already hit hard by the Covid pandemic. A pending national clean-fuels policy is also likely to increase costs to upgrade machinery.

Engen said options are being considered for its 120 000 barrel-a-day plant after a local news website reported it’s expected to shut in 2023 and may be converted into a fuel-storage terminal. If the plan is to close in two years, “it would not make economic sense to invest into bringing it back up,” said Elitsa Georgieva, an analyst at Citac.

Astron and Engen didn’t immediately reply to emailed requests for comment.

The Sapref refinery, a joint venture of Royal Dutch Shell and BP, also faces uncertainty as Shell reviews its shareholding in the business. Sasol has also been deciding on plans for its Natref refinery since conducting a review of the plant.

© 2021 Bloomberg L.P.

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Quote: “All four of South Africa’s oil refineries, have had accidents or are under review..”

Where have THE SKILLS gone?!

I personally know two Engineers (family members)that are still working there.
Astron Energy was formed in 2018 following primary shareholder Glencore PLC’s purchase of Chevron Corp.’s majority ownership in former Milnerton refinery operator Chevron South Africa (Pty.) Ltd. as well as 100% ownership interest in Chevron Botswana (Pty.) Ltd. from Off the Shelf Investments Fifty Six (RF) (Pty.) Ltd. (OGJ Online, Sept. 14, 2018).

Like everything else in SA. Another industry falling apart and being abandoned.

Maybe its just transformation??

this was my first thought as well…..hope we are wrong and the reasons given are true?

Maybe someone can expand on the article to provide a more comprehensive picture?

The refineries are old, obsolete and have been for some time. Without long term policy certainty, investment in new refinery development has stalled. Don’t expect these to come back online without significant policy actions by government.

End of comments.

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