Glencore admits deal to buy South African strategic crude oil reserves was invalid
The Strategic Fuel Fund (SFF) has reached an in-principle agreement with diversified miner Glencore to reverse the 2015 sale of South Africa's strategic crude oil reserves.
Glencore has agreed that the sale of the three-million barrels of oil was invalid, after first challenging the matter with the SFF and its parent company, the Central Energy Fund.
The SFF will refund the monies that Glencore paid at the time.
The SFF took the matter to the Western Cape High Court, seeking a declaratory order to set aside the sale of South Africa’s strategic crude oil reserves. The matter is under way and the fate of the reserves lie in the judge’s hands.
The fund argues that its former acting CE Sibusiso Gamede unlawfully concluded a series of agreements, which resulted in the disposal of South Africa’s ten-million barrels of strategic crude oil reserves.
The SFF states that the reserves were sold without any proper mechanism being put in place for “rotation” or for the SFF to repurchase the oil reserves, should there be a pressing energy supply crisis in South Africa.
The fund says it is taking the necessary actions to ensure the ownership of the reserves and the development of the energy sector in South Africa remains in the hands of the country.
The Organisation Undoing Tax Abuse called on Mineral Resources and Energy Minister Gwede Mantashe in June last year to ensure that the illegal sale of South Africa’s strategic crude oil reserves, valued at R9.3-billion, to various companies between December 2015 and January 2016, be reversed.
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