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S. Africa Cuts Oil From Iran as Industry Awaits Detail

March 22 (Bloomberg) -- South Africa’s foreign affairs ministry said it is reducing Iran oil imports as its largest supplier of crude oil faces international sanctions. A national oil industry group said it hasn’t been informed of the plan.

South Africa has “downscaled” Iran imports, partly in response to requests from the U.S., and also to diversify supplies, Clayson Monyela, a spokesman for the Department of International Relations and Cooperation, said by phone today.

Africa’s largest economy has been exploring ways to adapt to U.S. sanctions against Iran, which it relies on for 29 percent of its oil imports. President Barack Obama signed a law on Dec. 31 that denies foreign banks that do business with the Central Bank of Iran access to the U.S. financial system. The U.S. may bar access to its banking system should a country not make “significant” reductions in its Iranian crude oil purchases during the first half of this year.

“We are importing very little oil from Iran,” Monyela said in an interview on his mobile phone today. said. South Africa has suspended almost all oil imports, Reuters said, citing Ebrahim Ebrahim, the deputy minister of the Department of International Relations and Cooperation.

It’s “hard to believe” that South Africa has suspended almost all its Iranian oil imports, the South African Petroleum Industry Association’s Executive Director Avhapfani Tshifularo said by phone. SAPIA, the industry body, only expects to get feedback from a government task team on Iran by the end of May, he said.

Happy Americans

Thandiwe Maimane, a spokeswoman for the Department of Energy, declined to comment and referred questions back to Monyela. National Treasury spokesman Jabulani Sikhakhane declined to comment. South Africa’s Cabinet is deliberating on Iran and hasn’t made a decision, government spokesman Jimmy Manyi said in Pretoria.

Iran supplied 5.5 million metric tons of oil to South Africa in 2010, according to SAPIA. Iranian crude trades at a discount to global market prices.

“We have had bilateral discussions with the Americans as recently as last week” to discuss how to reduce oil supplies from Iran, Monyela said. “The Americans are quite happy with the measures we’ve implemented.”

Petroliam Nasional Bhd.’s Engen unit, which operates the country’s second-biggest refinery with a capacity of 135,000 barrels a day, says it sources about 80 percent of its supply from Iran. South Africa is working to ensure the refinery will remain open to secure fuel supply and protect jobs, Energy Minister Dipuo Peters said on March 20.

Diversifying Supply

“As an integrated group we always have contingency plans on our supply chain and sources,” Tania Landsberg, a spokeswoman for Engen, said in an e-mailed response to questions on March 19.

Sasol Ltd. said less than 20 percent of the crude used by the Natref refinery, which it owns with Total SA, is from Iran, and that it’s diversifying supply away from the Middle Eastern nation. The company is also in preliminary talks to sell a 50 percent stake in the Arya Sasol Polymer Co., which it co-owns with Iran’s Pars Petrochemical Co. The assets have a so-called carry value of about 4 billion rand ($518 million), Sasol has said.

Royal Dutch Shell Plc, which owns the nation’s biggest refinery with BP Plc, known as Sapref, declined to comment on March 20. BP and Chevron Corp., which operate a refinery in Cape Town, don’t buy Iranian crude.

MTN Waiting

MTN Group Ltd., Africa’s largest mobile-phone operator, said March 7 it will remain in Iran unless South Africa applies sanctions against the country. Iran is MTN’s second-biggest market by subscriber numbers. It owns 49 percent of MTN Irancell Telecommunications Services Co., the second-largest mobile operator, with the rest held by Iran Electronic Development Co.

The European Union decided two months ago to stop Iranian oil imports effective July 1. The EU and U.S. are trying to pressure Iran to abandon any work it may be conducting to acquire nuclear weapons capability. Iran insists that its nuclear program is strictly for civilian energy and medical research.

To contact the reporters on this story: Franz Wild in Johannesburg at; Jana Marais in Johannesburg at

To contact the editors responsible for this story: Andrew J. Barden at; John Viljoen at

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