April 23 (Bloomberg) -- BP Plc’s southern African unit said it will invest 5.5 billion rand ($596 million) in the next five years improving oil refining and storage in the region, including an upgrade of South Africa’s largest oil refinery.
BP Southern Africa will spend 4.7 billion rand in South Africa, including 2.5 billion rand upgrading the Sapref refinery in Durban, which it co-owns with Royal Dutch Shell Plc, Group Chief Executive Officer of Refining and Marketing Iain Conn said. Funds will also be invested in building 40 to 50 fuel-retail sites across the continent’s biggest economy and refurbishing existing forecourts, he said.
“One billion rand will be invested in the refurbishment of BP infrastructure, mainly tanks, terminals and storage facilities,” including 800 million rand in Mozambique, Conn told reporters today in Johannesburg. The new facilities “will support an additional 2,000 jobs in retail,” he said.
BP and Shell are among companies that operate one of four oil refineries in South Africa. The country’s plants are set for multibillion-rand upgrades as the government introduces cleaner fuels with lower sulfur and benzene levels. In 2011, the oil industry estimated it would cost about $3.1 billion for all refineries to comply with so-called Euro 4 fuel standards, or $3.7 billion to meet Euro 5 rules.
South Africa’s four oil refineries process 497,000 barrels of crude daily, with Sapref contributing 36 percent of the total, according to the South African Petroleum Association’s website.
The nation’s state-owned oil company, PetroSA, is studying the $10 billion Mthombo project in Port Elizabeth on the south coast, which will add 400,000 barrels of daily output, almost doubling current capacity.