State-owned oil and gas company PetroSA had started negotiations with potential investors in the planned 400000-barrel -a-day refinery in Coega, near Port Elizabeth, the company said on Friday.
The company was commenting on a call by Peter Noke, national director of the South African Petroleum Retailers' Association, for a partnership between the government and the private sector to ensure oil supply.
"The frequent shortage in the supply of fuel to service stations and the non-delivery by oil companies points to only one thing -- insufficient stock holding and poor planning," Noke said.
"What we need is a constant supply of crude and fuel to ensure a successful economy. Once the industry is stable, the state could withdraw systematically from the partnership, paving the way for local and (black economic empowerment) investment," he said.
PetroSA vice-president of new ventures: midstream, Joern Falbe, said on Friday that PetroSA had "from the beginning" indicated that it was looking for a partner in the $9bn project.
"In this sense, (the) private sector is definitely invited to participate in the project. Strategy is that PetroSA, as (a national oil company), will develop the project and co-invest to anchor the project in SA and give other investors confidence in the mega project. "
Noke said oil companies were concerned about the consequences of the PetroSA refinery. "They seem to fear that if a major 400000-barrel -a-day refinery comes on stream, their refineries will no longer be profitable and could face shut-down."
Shell SA has previously expressed a similar concern, saying production from the Coega refinery would displace volumes of fuel sold into the domestic market by existing refiners.
Falbe said in the medium term, oil companies should "modernise" their facilities to enhance their competitiveness. He said the refineries had an opportunity to upgrade their facilities.
He said PetroSA could also partner with existing coastal refineries. "As sub-Saharan Africa is exporting crude and importing finished product, there are also partnering options with other African players."
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