BP invests R4.7bn in quest for cleaner fuel

BP will invest billions in South Africa over the next five years, putting pressure on the government to finalise its details about clean fuel plans.

The energy company announced yesterday that R4.7-billion would be invested in the country, and that more than half of it will be used to upgrade its refining business.

BP and Shell run a joint venture in Durban called Sapref. It is the largest crude oil refinery in Southern Africa, with 35% of South Africa's refining capacity.

Iain Conn, BP chief executive of refining and marketing, said the facility will be modernised to comply with the clean fuel requirements announced by Finance Minister Pravin Gordhan in his Budget speech in February.

Although Conn said the investment was a sign that BP had confidence in the government's policy direction, he nevertheless put pressure on Pretoria.

"We anticipate the remuneration mechanism will be finalised shortly as we have already started to invest in the project and our intent is to be ready to produce clean fuels in 2017," Conn said.

Mozambique will get R800-million. It also has exploration activities in Namibia and Angola.

"BP's investment will improve the two countries' product- handling capability," said Conn.

Nelisiwe Magubane, director-general of Energy, affirmed yesterday that the move put the ball in the department's court.

"By the end of September, we should have finished the cost recovery mechanism," she said.