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Compiled by the Government Communication and Information System Date: 10 Oct 2008 Title: Coega oil refinery fully operational by 2015 -------------------- By Michael Appel Johannesburg - The PetroSA crude oil refinery at Coega will be fully operational by 2015, says Director General (DG) at the Department of Minerals and Energy, Adv Sandile Nogxina. The 400 000 barrel per day refinery, which is situated near Port Elizabeth in the Eastern Cape, is expected to create about 25 000 direct and indirect jobs. Speaking at the Oil Summit on Friday, Deputy Director General (DDG) at the department, Jacinto Rocha explained the cost of the facility, saying that for every barrel that is produced, $17 000 is needed in capital investment. Explaining why PetroSA, which is a state-owned oil and gas company, will build the facility instead of the private sector, the DDG highlighted that in the value chain, the intentional oil companies do not see much value in refining. "The margins in this business are upstream, especially at the rate at which the upstream prices have increased there has really not been an incentive for them [in the private sector] to build refineries and they are not building refineries. "In South Africa we either have a choice of not building a refinery or getting an international oil company to build one," said the DDG. Adv Nogxina said there was a need for the expansion of the refining capacity in South Africa, and that government had allowed the market to take advantage of that but the private sector did not respond. "When ever the markets fail, the state must intervene, and at the end of the day, the government is responsible for security of supply. "[For example] when there is no fuel in South Africa, you cannot expect the government to come out and say we [as government] waited for the private sector to invest and they didn't. "The same happened in the electricity sector, when we waited for the private sector to investment in the electricity industry but they didn't and that's why we are in the situation we are in today. "... so we have learnt from our past mistakes that we won't allow a situation where the private sector has shown no appetite for investment, in particular on issues of infrastructure," said the DG. The consultative summit, the DG said, which was convened by his department, was held to discuss what players in the industry could collectively do in order to come up with a so-called roadmap on oil. "Given the volatility of the oil prices, it became necessary that we have to bring our heads together in order to come up with a solution," said Adv Nogxina. The DG said issues that have risen in discussions include those focussed on the security of supply of oil, something that is a topic of discussions worldwide, as well as pricing policy and pricing mechanism, and the role of the state in the oil industry. The summit was themed "South African Oil dialogue: Response to global challenges". - BuaNews |
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