South Africa

Oil Traders Empty Key Crude Storage Hub

21 Sep 2017   South Africa

Companies said to be selling crude from Saldanha Bay in Africa Brent crude time-structure strengthens, encouraging sales Oil traders are emptying one of the world’s largest crude storage facilities, located near the southernmost tip of Africa, as the physical market tightens amid booming demand and OPEC production cuts. Total SA , Vitol Group and Mercuria Energy Group Ltd. are selling crude they hoarded in Saldanha Bay, South Africa, during the 2015-2016 glut when the market effectively paid traders to store oil, according to people familiar with the matter, who asked not to be named discussing private operations. Crude demand is now seasonally outstripping supply, tightening the physical market for some crude varieties to levels not seen in the last two years and encouraging traders to sell their stored oil. Learn More “The market is selling inventories from everywhere,” Mercuria Chief Executive Officer Marco Dunand said in an interview in […]

South Africa’s Huge Bet On Nuclear Energy

2 May 2017   South Africa

South Africa, the continent’s second largest economy, with the most organized business and financial sector in the region, has had its share of electricity related issues culminating in a spate of load shedding that upset its industrial customers of which there are quite a few. Eskom, the state owned utility, has gotten some of these problems behind it and has launched an ambitious generation building program that could add 9,500 megawatts to the presently installed electric generating capacity of 46,300 MWs. (Eskom supplies 95 percent of South Africa’s electricity needs, or about 45 percent of Africa’s entire electric generation., largely by burning coal. ) Despite this aggressive plan for multi-billion dollar power plant construction, that’s not why Eskom is back in the headlines. In 2014 South Africa’s President Jacob Zuma and Russia’s Vladimir Putin signed an agreement whereby Russia’s state-owned Rosatom would supply the country with eight nuclear power […]

China’s Sinopec buys first major African refinery in Chevron deal

23 Mar 2017   China, South Africa

China’s Sinopec ( 600028.SS ) ( 0386.HK ) said on Wednesday it has agreed to pay almost $1 billion for a 75 percent stake in Chevron Corp’s ( CVX.N ) South African assets and its subsidiary in Botswana, securing its first major refinery on the continent. China Petroleum and Chemical Corp, or Sinopec, Asia’s largest oil refiner, said the assets include a 100,000 barrel-per-day oil refinery in Cape Town, a lubricants plant in Durban as well as 820 petrol stations and other oil storage facilities. They also include 220 convenience stores across South Africa and Botswana. With a growing middle class, demand in South Africa for refined petroleum has increased by nearly 5 percent annually over the past five years, to currently total about 27 million tonnes, it said. Sinopec said it would […]

South Africa: The Next Hot Spot For Offshore Oil Exploration

2 Mar 2017   South Africa

South Africa’s land is known for its resources such as platinum, gold, diamonds, copper and coal. But its waters may be hiding future giant oil and gas discoveries potentially capable of changing the country’s power generation mix by reducing its use of coal. Dr. Anongporn Intawong, Team Leader Geoscientist at seismic surveys provider Spectrum, believes there could be a giant future discovery off South Africa’s coast. Intawong delivered a presentation ‘Future giant discovery in the Outeniqua Basin, offshore South Africa’ at Finding Petroleum’s event Finding East & Southern African Oil & Gas in London last week. “ What we are seeing is that [there] might be a future giant discovery in this basin, ” Intawong said at the event, reports Rigzone , whose assistant European editor Andreas Exarheas tweeted a photo from the presentation. Spectrum’s Intawong did not quantify the size of possible future discoveries, but reminded the audience […]

Future Giant Discoveries Could be Lurking Offshore South Africa

24 Feb 2017   South Africa

Future giant discoveries may be lurking in the Outeniqua Basin offshore South Africa, according to Anongporn Intawong, a team leader geologist at Spectrum. Future giant discoveries may be lurking in the Outeniqua Basin offshore South Africa, according to Anongporn Intawong, a team leader geologist at Spectrum. “What we are seeing is that [there] might be a future giant discovery in this basin,” Intawong told oil and gas industry delegates at a conference in London Thursday, which was attended by Rigzone. Although Intawong didn’t speculate on the potential size of any future discoveries, previous finds in the Outeniqua Basin have yielded recoverable reserves of up to 314 million barrels of oil equivalent, the Spectrum representative said. Interesting talk from Spectrum’s Anongporn Intawong on the potential of the Outeniqua Basin offshore South Africa – FP Event , London pic.twitter.com/MrOuATWYen — Andreas Exarheas (@Andreas_Ex) 23 February 2017 In an encouraging announcement for […]

South Africa looks to shale gas future

9 Mar 2016   South Africa

The South African government said Tuesday it was expecting to reap the rewards of shale natural gas, with exploration slated as early as 2017. Royal Dutch Shell is among the early entrants into the South African shale sector , reviewing the prospects for gas in the country’s Karoo basin. South African Minister of Rural Development and Land Reform Gugile Nkwinti told government officials in Pretoria shale gas exploration presents a real opportunity for economic growth in the country. “Exploration activities are scheduled to commence in the next financial year,” he said in a statement. “This will lead to excellent prospects for beneficiation and […]

Deal agreed to build $6 billion Mozambique-South Africa natural gas link

To boost gas use across southern Africa A cooperation agreement has been signed to build a $6 billion, 2,600 km pipeline to send natural gas from offshore Mozambique to South Africa, the partners in the project said Tuesday. The planned link will help monetize the vast gas resources of Mozambique’s Rovuma Basin and meet growing demand in South Africa for gas for power generation. The line will also provide offtake opportunities for other countries in southern Africa along the way and will also deliver gas to key towns and settlements across Mozambique. Article continues below… The Rovuma Basin is thought to hold more than 200 Tcf of gas, enough for the planned LNG projects and the pipeline. The pipeline cooperation agreement is the most concrete step taken yet to realize the project and “assures the financing commitments required for the pre-investment and engineering […]

South African waters drawing in energy companies

31 Oct 2015   South Africa

Southern African waters drew more interest from energy explorers with Norway’s Statoil and Italy’s Eni wading into Mozambique waters. Statoil and Eni were among those winning bids to explore for potential reserves in the waters off the coast of Mozambique, where depths range from 650 feet to 5,900 feet. Nick Maden, a regional exploration director for Statoil, said Mozambique waters are among the more promising frontier basins in the area , where the oil potential is said to be “significant.” “The position strengthens and develops our global exploration portfolio,” he said in statement. Eni last year said it discovered natural gas in a well in an area off the Mozambique coast thought to hold 85 trillion […]

Chevron Sees Additional South African Oil Refinery Causing Glut

12 Oct 2015   South Africa

South Africa doesn’t need another oil refinery because the slowing economy has curbed demand and the country has ample gasoline production, said Shash Rabbipal, the new chairman at the local unit of Chevron Corp., the second-largest U.S. energy company. “Should another refinery be built, it would mean that the country would have to increase its exports of products and this would mean a change from the current practice of ensuring that supply catered mainly for local demand,” Rabbipal, 47, said Friday in an interview in Cape Town. He has worked for Chevron for 25 years and was appointed to the post last week. The six South African refineries, including San Ramon, California-based Chevron’s Cape Town facility, process a combined 703,000 barrels of crude a day, exceeding demand, according to Rabbipal. State-owned PetroSA Ltd. proposes a new plant on the south coast that would be the biggest on the continent […]

Power Outages Dim South Africa’s Prospects

3 Jul 2015   South Africa

Residents of this sprawling township famous for its resistance to white-minority rule are fighting a battle they thought consigned to history: keeping the lights on. National power company Eskom Holdings Ltd. is reeling from years of underinvestment and poor management, surrendering to power outages that frequently plunge Soweto’s 1.3 million residents into darkness. Nonayona Mkeshana and her neighbors have resorted to cooking over open fires and singing and dancing in the street now that television sets have gone dark. “We’ve had to get used to it, to survive,” said Ms. Mkeshana, a 59-year-old grandmother who lives with her son and his children. South Africa’s Treasury on Wednesday said it sold its stake in mobile company Vodacom Group Ltd. VOD -1.87 % to raise $2 billion to keep Eskom solvent. Chief Executive Brian Molefe said blackouts could continue for months as Eskom catches up on years of neglected […]

Power Outages Mar South Africa’s Economic Expansion

9 May 2015   South Africa

It takes a lot of power to extract traces of gold from the 60,000 tons of sludge DRDGOLD Ltd. DRD -4.05 % sends through its machinery here each day. That is something that the Johannesburg-based company hasn’t been able to count on recently. “It’s a worrying thing that you’ve got to watch all the time,” said Niël Pretorius, DRDGOLD’s chief executive. South Africa used to be one of the few countries on the continent where most people had reliable access to electricity. But a lack of maintenance and investment has pushed state-run power provider Eskom Holdings Ltd. into a daily crisis as it struggles to meet demand. Blackouts are threatening to drive Africa’s second-largest economy off a cliff, […]

Sasol Cuts 1,500 Jobs as Oil Price Slumps

10 Mar 2015   South Africa

South African petrochemicals company Sasol Ltd. has cut 1,500 jobs and said more will go, the latest layoffs in a global oil sector contending with the commodity’s price rout. Head count at the company will be “dramatically down” by June, with Sasol pressing ahead with steep cuts in capital spending and a reduction in its annual dividend, Chief Executive David Constable said. But Mr. Constable said the scale of the industry’s cutbacks are such that they might catapult oil prices higher again in 2017 after their roughly 50% slide since last summer. “The capital projects that we’re cutting back on—that the majors are cutting back on—these projects take years and years to start back up. You don’t flip the switch,” he said in an interview. “That’s what could give you a high-side well above 100 [dollars a barrel],” he said. Sasol itself has “put on the shelf…until further […]

Zuma Seeks Nuclear Power to Solve South Africa’s Energy Crisis

13 Feb 2015   Nuclear, South Africa

South African President Jacob Zuma said his priority is to solve the energy crisis in the country that’s curbing output at mines and factories and stifling economic growth, including adding more nuclear power by 2023. “We will pursue gas, petroleum, nuclear, hydropower and other sources as part of the energy mix,” Zuma, 72, said in his annual state-of-the-nation speech in Parliament in Cape Town on Thursday. “The country is currently experiencing serious energy constraints which are an impediment to economic growth and is a major inconvenience to everyone in the country.” Zuma’s speech follows nine consecutive days of rolling blackouts implemented as demand for power outstripped supply. State utility Eskom Holdings SOC Ltd., which provides 95 percent of the nation’s electricity, has warned of almost-daily blackouts until the end of April. The power crisis has soured investor appetite for South Africa’s currency and debt. The rand reached […]

Scrapped: Oil Prices Shelve an $11 Billion Gulf Coast Project

South African energy giant Sasol Ltd. said Wednesday it was shelving an $11 billion project on Louisiana’s Gulf Coast, imperiling one of the largest foreign investments on U.S. soil because of the plunge in oil prices. Sasol has spent years planning to expand its chemical factory outside Lake Charles, La., into a sprawling facility to turn natural gas into industrial compounds and diesel fuel. In October, the company committed $8 billion for equipment that produces ethylene, which is used to make plastics and other products. That plant is still going forward, but Sasol said on Wednesday that a bigger project, to use natural gas rather than crude to make diesel, is on hold. Plummeting oil prices have forced it to push back its own 2016 deadline for deciding whether to build […]

Blackouts Present Biggest Risk to South Africa’s Economy

25 Sep 2014   South Africa

South Africa has an electric bill coming due that’s threatening everything from its swimming pools to its sovereign debt. Consumers are asked almost daily to switch off their water heaters, pool pumps and anything else that will save power during peak periods. Industrial customers are also asked to conserve energy, even if it means reducing production. And when that’s not enough, Eskom Holdings SOC Ltd. orders managed blackouts. The state-owned utility can’t provide reliable electricity to run Africa’s second-largest economy. It has a long-term plan to expand generating capacity by more than 40 percent, while facing a 225 billion-rand ($20 billion) funding shortfall through 2018. The company has faced supply shortages for years and has said it may be another five years before it can guarantee the lights will always be on. “Eskom is in dire straits,” said Anne Fruhauf, southern Africa analyst at New York-based risk adviser Teneo […]

Fracking Opponents Renew Call for South African Shale-Gas Halt

22 Jul 2014   South Africa

A South African environmental group renewed its call for a moratorium on shale-gas fracking, as the government moves closer to a decision on whether to allow the process opponents say imperils water quality. The Treasure Karoo Action Group, named after the semi-desert area of South Africa that has attracted petroleum exploration companies, started in Johannesburg today the latest phase of a campaign to block the drilling technique. An April 2011 moratorium placed on shale-gas exploration in South Africa ended in September 2012. The government on Oct. 16 published proposed regulations for hydraulic fracturing as it seeks to tap as much as 390 trillion cubic feet of resources in the Karoo. Opponents of fracking, which blasts water, chemicals and sand into rock to release natural gas, say it risks contaminating ground water. Royal Dutch Shell Plc (RDSA) is among explorers to have applied for permits to explore the Karoo. South […]