Gwede Mantashe Hails Approval of CEF’s Acquisition of SAPREF Refinery

The CEF’s acquisition of SAPREF will also allow for investment in new technologies and operational upgrades to modernize the refinery.

Minister of Mineral and Petroleum Resources, Gwede Mantashe, has welcomed the Competition Commission’s green light for the Central Energy Fund (CEF) to acquire key assets of the SAPREF refinery, South Africa's largest crude oil processing facility, located along the east coast in Durban. This acquisition follows a Sale Purchase Agreement between bp Southern Africa (bpSA) and Shell Downstream South Africa (SDSA), which transfers ownership of crucial SAPREF assets to CEF. These assets include the refinery land, crude oil and finished product storage tanks, pipelines that connect SAPREF to the Island View terminal, and the Single Buoy Mooring (SBM) for importing crude oil.

 

However, the sale notably excludes SAPREF (Pty) Ltd itself, bp’s marketing businesses, operations at the Island View terminal, and the Blendcor lubricants blending and grease manufacturing facility. According to the Department of Mineral and Petroleum Resources (DMPR), this acquisition is a significant step in CEF’s broader strategy to strengthen South Africa’s energy independence and secure the future of local fuel production. In recent years, several local refineries have prematurely shut down, making the country a net importer of refined petroleum products. This reliance on imports poses serious risks to economic stability and fuel supply security, while also exporting vital jobs at a time when the unemployment rate remains persistently high.

 

Minister Mantashe underscored the importance of the deal, saying, “This acquisition not only ensures the continued availability of liquid fuels but also provides a strategic opportunity to revive local refining capacity, which is essential for energy security and economic growth.” He emphasized that revitalizing SAPREF will preserve jobs and contribute to South Africa’s industrial base, particularly in sectors reliant on a stable petroleum supply. The DMPR echoed this sentiment, noting that the acquisition strengthens South Africa’s position in the energy value chain and ensures a sustainable local supply of refined petroleum products. Beyond addressing energy concerns, the move is seen as part of broader efforts to secure critical infrastructure, reduce dependence on imports, and stimulate job creation.

 

The CEF’s acquisition of SAPREF will also allow for investment in new technologies and operational upgrades to modernize the refinery. This will not only increase refining capacity but also improve environmental standards, aligning with South Africa's commitments to cleaner energy and sustainability. Furthermore, the deal provides a framework for future expansions and partnerships aimed at boosting the country’s energy resilience. By restoring and optimizing SAPREF’s operations, the CEF aims to position South Africa as a regional leader in energy production and distribution, ensuring the country can meet both domestic and international demand for refined petroleum products.

 

This acquisition comes at a critical juncture as global energy markets remain volatile, with rising prices and supply chain disruptions due to geopolitical tensions. A revitalized SAPREF, under the stewardship of CEF, is expected to mitigate these risks and provide a buffer against external energy shocks. With the Competition Commission’s approval, the path is now clear for the CEF to proceed with the acquisition and begin the process of revitalizing SAPREF, bolstering South Africa’s economic and energy future.