bp, Shell agree to sell Sapref land, associated assets to the CEF

27th May 2024 By: Tasneem Bulbulia - Senior Contributing Editor Online

bp, Shell agree to sell Sapref land, associated assets to the CEF

Sapref refinery

Following successful negotiations, bp Southern Africa and Shell Downstream South Africa (SDSA) have reached an agreement for the sale of their respective 50% ownership of assets located at the Sapref refinery precinct, in KwaZulu-Natal, to South African State-owned entity the Central Energy Fund (CEF).

The sale includes SDSA and bpSA’s interests in the Sapref land and other associated assets, which includes tanks, process units, pipelines to and from Sapref to Island View terminal, and the Single Buoy Mooring for crude imports.

Forty-eight permanent Sapref employees, who work at the refinery site, together with 16 trainees, will transfer with the business.

The sale excludes bpSA’s marketing businesses, the Island View terminal operations and the lubricants blending and grease manufacturer, Blendcor.

The sale will be subject to all applicable regulatory approvals.

“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 the CEF is well-placed to take Sapref forward,” says bpSA CEO Taelo Mojapelo.

“Sapref has played a significant role in relation to local energy security and economic development thanks to its extremely committed management team and staff.

“This transaction will allow the CEF to build on Sapref’s history and to invest in local refining going forward. SDSA will continue to manage local supply to customers through our extensive terminal network,” says SDSA country chair Aluwani Museisi.

Situated in Durban, Sapref was commissioned in 1963 as a 50:50 joint venture between bpSA and SDSA.

The refinery was severely impacted on by the April 2022 flooding in KwaZulu-Natal, leaving the refinery non-operational.