BP and Shell have decided not to repair their damaged Sapref joint venture, signaling that the Durban, South Africa, refinery – which includes the last base oil plant in sub-Saharan Africa – may not reopen unless purchased by another operator.
The refinery is a 50-50 partnership between the British energy giants, which idled it in March of last year saying they needed to reduce spending at the site. At the time the companies said they would try to lower operational costs and would consider resuming operations themselves, selling it or shuttering it permanently.
A month earlier the facility sustained extensive damage during severe flooding. The joint venture estimated repairs would take three to five years and a large capital infusion, so in October they launched an initiative to reduce the refinery’s workforce – a move they described as necessary if repairs were to be considered.
In late April, the local News24 website reported that the joint venture and workers had reached an agreement to cut 350 jobs. Last month, however, a BP spokesperson told Lube Report that the companies decided not to proceed with repairs.
She added that the companies were still considering “available options for the remaining assets,” including selling them. No timeline for a decision was given.
The overall refinery has capacity to process 180,000 barrels per day of crude oil. It’s base oil plant had capacity to make 172,000 metric tons per year of API Group I oils.
Africa still has seven base oil plants, according to Lubes’n’Greases Base Stock Plant Data – five in Egypt and one each in Libya and Algeria.