Updated: Wed, 27 Mar 2013 07:56:38 GMT | By Sapa

PetroSA And Sinopec Petroleum Sign Agreement

South Africa's PetroSA and China's state-owned Sinopec petroleum and petrochemicals conglomerate have signed a two-year agreement, they said on Tuesday.


Gallo Images

The pact represented a move closer towards Project Mthombo, a potential new crude oil refinery in Port Elizabeth.

"The Framework Agreement enables the two companies to move forward this global-scale crude oil refinery project at Port Elizabeth's Coega Industrial Development Zone (IDC)," the parties said in a joint statement.

The agreement was signed in Pretoria by PetroSA chairman Dr Benny Mokaba and Sinopec chairman Fu Chengyu.

Both parties agreed to integrate the IDC into the next phase of the development.

In May 2012 PetroSA and Sinopec both national oil companies concluded a Joint Study Agreement through which the companies committed to working together to develop the business case for Project Mthombo.

The framework agreement, which is effective immediately, also creates opportunities for co-operation in the areas of oil and gas exploration, and development and production of projects in South Africa and the surrounding countries.

Other areas of co-operation include the investigation of downstream opportunities in the southern African region as well as the development and acquisition of storage and logistical infrastructure.

"The FA was an important building block in making Project Mthombo a reality, and gives PetroSA the opportunity to extend a mutually beneficial relationship with a major national oil company.

"This strategic relationship can and will be leveraged to benefit PetroSA's sustainability and growth programmes," said Mokaba.

Fu said: "South Africa is politically stable and economically developed. Sinopec pays close attention to its business growth in South Africa and wishes to contribute to local economic and social development."

He said Sinopec would push forward the Mthombo project as long as it was economically and technically feasible.

The two companies will also jointly explore other co-operation opportunities in the hydrocarbon industry.

According to PetroSA, once built, Project Mthombo will be the biggest crude refinery in Africa and it will provide national security of supply for South Africa's future fuel requirements.

By 2020 South Africa will have to import about 180,000 barrels per day of gasoline and diesel if there is no significant investment in local refining capacity, PetroSA cautioned.

News & Features

You and Your Business

  • Retired Couple  Rex Features

    More and more South African companies are offering retirees some form of financial relief...

  • Online  Anatoliy Babiy\Getty Images

    Many small business owners perform the role of maintaining their enterprise’s online presence, which generally includes the website or blog, and social media channels like Facebook, Twitter and Pinterest.

  • Customer Service   Getty Images

    Perhaps I’m just getting grouchier but on the whole it seems as though the level of customer service in South Africa is going from dismal to downright appalling...

  • Thinking  Tomas Rodriguez Corbis

    No one person can do everything, and understanding how to pick your tasks is a key step towards making the best use of your time. Make these choices second nature before starting your tasks to make 2014 one of the most productive yet.

Bizarre Business

  • Sting  FilmMagic. Getty Images

    Rock legend Sting has announced that he won't be leaving his riches to his children, as he feels they would only be "albatrosses around their necks.'

  • Students Find Money In Couch  ASSOCIATED PRESS

    What would you do if you bought a second-hand couch and found R500 000 stuffed inside it? Three roommates in America were faced with just that moral dilemma recently...

  • Man Throws Away Winning Lottery Tickets  Associated Press

    A US citizen residing in Pennsylvania accidentally threw out lottery tickets worth $1.25 million between them after he read the numbers incorrectly, the New York Daily News reported.

  • Man Fakes Deaths For R4.2 Million  Wikimedia Commons

    A former Australian funeral director has this week been accused of faking deaths for large insurance pay-outs totalling R4.2 million.