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BP and Shell agreed in May 2024 to sell their assets at Sapref, the Durban refinery that once had 35 percent of South Africa’s refining capacity, to the state’s Central Energy Fund for one rand. Reuters and the investigative group Open Secrets have reported that the sellers also agreed to pay between R280 million and R286 million toward the first year’s operating costs. The fund has since recorded an interim gain of R1.8 billion on the purchase. The bill now runs the other way. On September 22 the fund presented Parliament with a revival program estimated at R117 billion, about $7.15 billion, for a refinery of about 400,000 barrels a day, more than twice Sapref’s old capacity, with scope to reach 650,000. Gwede Mantashe, minister of mineral and petroleum resources, wants the National Treasury to fund it directly. Four months earlier, the chair of Parliament’s mineral and petroleum resources committee said the fund’s group had a R65.8 billion project pipeline, of which R64.1 billion was expected to come from a strategic partnership, and warned of a material strategic risk should private capital fall short of what was projected. No strategic partner had been announced by September 27 in the reporting reviewed for this brief, and the Treasury is in a close-out period until October 20, the day before its medium-term budget statement. For tankers the stakes can be measured. South Africa imported 20.0 million tonnes of refined petroleum oils in 2025, against 8.5 million in 2019, while its crude imports fell from 18.2 million tonnes to 7.3 million. On this desk’s arithmetic, a 400,000 barrel-a-day refinery running at capacity would need about 73 VLCC cargoes of crude a year, roughly what the whole country imported in 2019. At $7.15 billion it would cost about $17,900 per barrel of daily capacity, against about $30,800 at Nigeria’s Dangote refinery and about $61,600 at Mexico’s Olmeca, on the same arithmetic.
📋 In This Issue:
⚖️ The Story:
What the state bought for one rand, what BP and Shell kept, the plan and its estimated cost, who is being asked to pay, what $7.15 billion buys elsewhere, what it means for tankers, the case against this brief and what the record supports
📊 By The Numbers:
The $7.15 billion, the one rand, the R1.8 billion gain, the roughly 400,000 barrels a day, the import tonnes and the cost per barrel of daily capacity
🌍 Why It Matters:
What it changes for the product tanker owner and broker, the crude trader and VLCC owner, the lender and project financier and the fuel importer at Durban
👀 What To Watch:
The October 21 budget statement, Parliament’s follow-up, the investment decision, the first-phase contracts, the moorings, the trade data and the falsifier that would overturn two of this brief’s findings
🚨 Gosships Signal:
Who has paid so far, and who is being asked to pay next
