Shell, BP halt operations indefinitely at Southern Africa’s biggest crude oil refinery

Tshegofatso Molefe

BP and Shell will next month halt operations at Sapref indefinitely as they mull over the future of the refinery.

“The decision has been taken to allow an informed finalisation on the various options available to the shareholders, a sale option being the most preferred,” the companies said in a joint statement on Thursday afternoon. “Until decisions about the future of the plant have been made – including a possible change of ownership – the Sapref shareholders are unable to commit to further investment in the refinery.” 

A “spend freeze” and a “pause” of refinery operations will begin no later than the end of next month, Shell and BP said.

While the “pause” of operations will be for an indefinite period, the shareholders said the refinery may possibly be restarted in the future, including in the event of a sale.

Located in Durban, Sapref is the largest crude oil refinery in Southern Africa and accounts for 35% of South Africa’s refining capacity.

Shell and BP said they will use other existing assets and trading arrangements to ensure the ongoing security of fuel supply to the country and their consumers. 

“SAPREF has made immense economic contributions at both a local and national scale,” said BP Southern Africa CEO Taelo Mojapelo. “For this reason, we continue to pursue the sale of our share in the refinery so that it can continue to advance its legacy as a reliable, safe and productive asset. Leading up to the refining pause, we have put contingencies in place to ensure that this decision does not impact our customer-facing businesses in South Africa or our fuel supply obligations.”

Hloniphizwe Mtolo, country chair for Shell Downstream South Africa, the decision to halt operations was a difficult one but reiterated that Shell is committed to security of supply to its customers. Mtolo said South Africa continues to be a key location for the company. News24

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