The state-owned Central Energy Fund SOC Ltd. will purchase the entirety of BP Southern Africa (Pty) Ltd. and Shell Downstream South Africa (Pty) Ltd.’s shares in SAPREF (Pty) Ltd., the country’s largest refinery, in exchange for a 100% shareholding. This transaction represents an immense shift in the fuel business in South Africa.
The firms’ interests in the land, the tanks holding crude and finished products, the process units, and the vital pipes connecting the refinery to the Island View terminal are among the assets included in the transaction. The Single Buoy Mooring, a vital piece of infrastructure for the import of crude oil, is also included in the transaction. As per the information shared in an email statement, this all-inclusive agreement guarantees that the refinery’s significant operational components be acquired by the Central Energy Fund.
Notably, about 48 employees currently working at the SAPREF refinery site along with 16 trainees will transfer to the new ownership, ensuring continuity and stability for the workforce amidst the transition. However, the sale arrangement excludes several significant segments such as SAPREF itself, BP Southern Africa’s marketing businesses, operations at the Island View terminal, and Blendcor (Pty) Ltd., a lubricants blending and grease manufacturing firm.
BP Southern Africa’s Chief Executive Officer, Taelo Mojapelo, commented on the deal, highlighting its strategic importance. “This agreement is viewed as a positive outcome not only for BP Southern Africa but also for the broader South African fuel industry and the nation as a whole,” Mojapelo stated. He emphasized that the divestiture aligns with BP’s global strategy and reflected a deliberate decision to find a buyer who is committed to the future of the refinery.
Located in Durban, the SAPREF refinery was established in 1963 as a joint venture between BP Southern Africa and Shell Downstream South Africa, each holding a 50% stake. At its operational peak, the refinery had a capacity of processing 180,000 barrels per day. Although the refinery operations were paused in 2022, SAPREF has continued to fulfill the fuel requirements of both companies through imported fuels.
The sale decision was made during a period of significant shifts in the global energy industry, as major oil firms reassess their asset allocation and investment plans in response to shifting market conditions and mounting demand for sustainable energy sources. Both BP Southern Africa and Shell Downstream South Africa anticipate a seamless transition, highlighting their commitment to ensuring a robust and sustainable fuel supply system for South Africa. The transaction is subject upon regulatory approvals. In addition to changing the ownership and management structure of the biggest refinery in South Africa, this calculated sale highlights the continuous changes taking place in the global oil and gas sector.
