BP to invest R4.7bn in SA projects
A ‘sign of faith’ in country
BP WOULD invest nearly R5 billion in South Africa as a sign of its faith in the direction in which the country was heading, the British oil and gas company said yesterday.
“It gives me great pleasure to announce that BP will be investing in excess of R5bn in Mozambique and South Africa over the next five years, commencing in 2013, which will be new plant and infrastructure upgrades,” said BP refining and marketing chief executive Iain Conn.
He said R800 million would be invested in Mozambique and R4.7bn in South Africa.
“This investment is designed to improve safety, customer experience, operational efficiency, help with government to improve energy security, and enable the transition towards cleaner fuels.”
He said R2.5bn would be invested in upgrading refinery infrastructure at the SA Petroleum Refineries (also known as Sapref), its joint venture with Shell in KwaZulu-Natal.
“Most of these funds in the refinery are to be utilised to promote South Africa’s clean fuels requirement,” he said.
Finance Minister Pravin Gordhan in February announced a support mechanism for biofuels and an upgrade of refineries to encourage South Africa to produce cleaner fuels.
“We anticipate that the remuneration mechanism will be finalised shortly, as we have already started to invest in the project and our intent is to be ready to produce clean fuels in 2017,” Conn said.
More than R1bn would be invested in terminals in South Africa and Mozambique.
The balance of the investment would be in the “retail network”. Conn said BP had formed a partnership with Pick n Pay, and 120 Pick n Pay Express stores would be opened in the next five years.
He said the investment was approaching 5 percent of all the capital that went into the marketing, refining, and chemical business of BP. “We are in about 70 countries, and South Africa is going to end up with nearly 5 percent of the money. I think that tells you something.”
BP was encouraged by developments in South Africa and Mozambique.
“In South Africa, I am conveying our appreciation to the government for adopting the National Development Plan as the blueprint for tackling the many challenges that continue to face this great nation.”
Conn said BP was committed to transformation and the need to create more jobs and build entrepreneurs.
“This is part of our ongoing efforts to be a good corporate citizen as we pursue our business objectives in all the markets in which we operate.”
Conn said BP was not considering fracking for shale oil and gas in South Africa.
“We have been fracking since the 1940s. BP is in shale, but not here,” he said. “We are looking at shale in a number of places in the world, including China. We have not as yet prioritised shale in South Africa.”
He said fracking needed to be done safely and its impact on the environment needed to be considered.
Fracking, or hydraulic fracturing, is the process of extracting natural gas from shale rock layers deep within the earth.
Mineral Resources Minister Susan Shabangu said last year that five companies had applied in 2010 to explore for shale gas in the Karoo.
Energy department directorgeneral Nelisiwe Magubane said yesterday the government “welcomed” BP’s investment.