‘Greedy and arrogant’: Mantashe slams Shell & BP’s spend freeze at SAPREF

Mineral Resources and Energy Minister, Gwede Mantashe has called Shell and Beyond Petroleum (BP) greedy and arrogant for pausing refinery operations at SAPREF, their Durban-based facility.  

SAPREF, a joint venture between Shell and BP recently announced that the refinery will pause operations no later than March 2022. Shell and BP are also looking at selling the facility which is responsible for a third of the country’s fuel supply.

GWEDE MANTASHE SLAMS SHELL & BP

Mantashe was speaking during a SONA debate. He also touched on the oil that was discovered in Ivory Coast and Mozambique yet they were interdicted in South Africa.

This week, the Makhanda High Court dismissed Shell and Mantashe’s application for leave to appeal the court’s decision which interdicted them from doing the Seismic survey off the Wild Coast.

“Related is the greed and arrogance of certain petroleum entities that want to shut local refineries and import the product. This is something that will cause job losses to our people, cost our economy dearly, and lead to uncertainty of supply. For our national and economic security, we are taking drastic measures in this regard.

“Energy security is critical for economic reconstruction and recovery, particularly for a developing economy like ours, that seeks to industrialise.”

Mineral Resources and Energy Minister, Gwede Mantashe

WHY IS SAPREF PAUSING REFINERY OPERATIONS?

The SAPREF refinery is a 50-50 joint venture between British Petroleum (BP) and Shell capable of producing 180 000 barrels per day, which accounts for 35% of South Africa’s refining capacity.

Shell and BP said the decision was taken to allow an informed finalisation on the various options available to the shareholders, a sale option being the most preferred. 

Until decisions about the future of the plant have been made – including a possible change of ownership – the SAPREF shareholders said they are unable to commit to further investment in the refinery. 

Last year, the Engen refinery in Wentworth turned into a storage terminal, after operating for 67 years. The plant had shut down after it was engulfed in flames in December 2020.

This week, Glencore also announced that this year they will be opening their new and improved refinery, Astron Energy in Cape Town.

ALSO READ: Southern Africa’s biggest refinery pauses production indefinitely