bpSA and Shell sell SAPREF Refinery assets to Central Energy Fund

bp Southern Africa (Pty) Ltd (bpSA) and Shell Downstream South Africa (Pty) Ltd (SDSA) have successfully negotiated the sale of their respective 50% ownership stakes in the SAPREF Refinery Precinct to the South African state-owned entity, Central Energy Fund SOC Ltd (CEF).

The transaction includes the SDSA and bpSA interests in the SAPREF land, as well as associated assets such as tanks, process units, pipelines connecting SAPREF to the Island View terminal, and the Single Buoy Mooring for crude imports. As part of the deal, 48 permanent SAPREF employees and 16 trainees will transfer to the new ownership.

However, the sale does not cover SAPREF (Pty) Ltd, bpSA’s marketing businesses, the Island View terminal operations, or the lubricants blending and grease manufacturing entity, Blendcor (Pty) Ltd. The agreement is contingent upon obtaining all necessary regulatory approvals.

Local media reports indicate that the transaction amount was a nominal ZAR1 (USD0.05), with the responsibility for the environmental cleanup being assumed by the South African government.

In 2022, SAPREF announced that it was halting its refinery operations. The decision was made as the shareholders considered its options, including a sale, as the SAPREF shareholders said they could not commit to further investment in the refinery.

Taelo Mojapelo, CEO of bpSA, commented on the sale, stating,“We view this agreement as a positive outcome for bpSA, for South Africa’s fuel industry and for the country as a whole. SAPREF is an important refinery, the largest in Southern Africa, but continued ownership does not fit with bp’s global strategy. Finding a buyer committed to the future of the refinery was an important consideration for us – we believe CEF is well-placed to take SAPREF forward.”

About SAPREF

Located in Durban, SAPREF was established in 1963 as a 50-50 joint venture between bpSA and SDSA. The refinery, at its peak, had a capacity of 180,000 barrels per day. Currently, SAPREF (Pty) Ltd manages the Single Buoy Mooring (SBM) on behalf of the oil companies that own it. Despite the pause in refinery operations, SAPREF continues to meet SDSA and bpSA’s market fuel requirements through imported fuels.

About bpSA

bp has been operating in South Africa for a century, engaging in various activities from oil and gas exploration, crude oil importation and refining, to the distribution and marketing of gas and refined products through bp retail, wholesale business (Masana), bp Marine, and Castrol.