South Africa faces $8 billion bill to revive state-owned refineries

SEATTLE (Oil Monster): South Africa will need more than $8 billion to revive two mothballed state-owned refineries, officials told ​lawmakers, as the country seeks to strengthen energy ‌security and reduce dependence on imported fuels.

• South Africa's state-owned Central Energy Fund acquired the flood-damaged 180,000 barrels-per-day Sapref refinery in 2024 ​from BP (BP.L) and Shell (SHEL.L) for a token 1 ​rand ($0.0617).

• CEF said it plans to revive the refinery's liquefied ⁠petroleum gas import and distribution business and lease ​out existing storage tanks to generate early revenue.

• The plan is ​to upgrade the refinery to a 400,000 to 650,000 bpd plant with National Treasury approval and a final investment decision targeted for ​2027/28, the CEF said in a statement late on ​Monday.

• The total refinery investment is expected to cost around $7.15 billion, CEF ‌said, ⁠without providing funding details.

• One banking source and one government source said they were discussing potential financing from the pan-African Afreximbank, among others.

• The CEF is weighing plans to revive ​its Mossel Bay ​gas-to-liquids refinery, ⁠which has been idle since 2020 due to a shortage of domestic gas feedstock.

• The ​Mossel Bay GTL refinery, operated by PetroSA ​and now ⁠part of the South African National Petroleum Company, will be restarted in phases.

• Phase 1 targets around 18,000 bpd at ⁠an ​estimated investment of 5.8 billion rand.

• Phase ​2, targeting production of 46,000 bpd, will require an extra R8.5 billion ($525.35 ​million). ($1 = 16.1797 rand)

Courtesy: www.reuters.com