Mineral Resources and Energy Minister Gwede Mantashe has welcomed the Competition Commission’s approval of the Central Energy Fund’s (CEF's) application to acquire the South African Petroleum Refineries (Sapref) refinery.

This approval follows the completion of the sale purchase agreement between bp Southern Africa (bpSA) and Shell Downstream South Africa (SDSA), transferring assets located at the Sapref precinct to the State-owned CEF.

The transaction includes the SDSA and bpSA interests in the Sapref land and other associated assets, which include crude and finished product tanks, process units, pipelines connecting Sapref to Island View terminal, and the Single Buoy Mooring for crude imports.

The sale excludes Sapref (Pty) Ltd, bp’s marketing businesses, the Island View terminal operations and the Blendcor lubricants blending and grease manufacturing plant.

The acquisition marks a milestone in CEF’s investment and growth strategy in the energy value chain.

“As a department charged with the responsibility of securing energy supply to power the South African economy, we have seriously noted with concern the declining local refining capacity which resulted in the country becoming a net importer of refined petroleum products,” the Department of Mineral Resources and Energy says.

The department warned that this trend threatened the country’s economic stability and security of supply of petroleum products, and contributed to the loss of jobs – jobs that were critical for addressing South Africa’s high unemployment rate.

“The Commission’s approval is important because it does not only authenticate the acquisition, but reinforces South Africa’s concerted efforts aimed at guaranteeing adequate supply of liquid fuels in the midst of premature closures of refineries. The acquisition of Sapref, and therevitalisation thereof, will ensure that South Africa, through CEF, continues with the exploitation, development and distribution of petroleum products,” the department avers.