Saudi Arabia in talks to build refinery, petrochemicals plant in South Africa

Saudi Arabia’s Energy Minister Khalid Al-Falih speaks during a news conference in Riyadh, Saudi Arabia January 9, 2019. (File Photo/Reuters)
Updated 18 January 2019

Saudi Arabia in talks to build refinery, petrochemicals plant in South Africa

  • Saudi Arabia is in talks to build an oil refinery and a petrochemicals plant in South Africa as part of $10 billion of investments in the country
  • Saudi oil would be used in the planned refinery whose construction would be led by Saudi Aramco

PRETORIA: Saudi Arabia plans to build an oil refinery and petrochemicals plant in South Africa as part of $10 billion of investments in the country, Saudi Energy Minister Khalid Al-Falih said on Friday after talks with his South African counterpart.
The announcement is a much-needed vote of confidence in Africa’s most industrialized economy, where President Cyril Ramaphosa is trying to attract $100 billion of new investments to rekindle growth.
The new refinery would reduce the need for refined product imports and cement Saudi Arabia’s dominant position in South Africa’s oil sector. The Kingdom already supplies 40 percent of the crude oil consumed in South Africa.
“Saudi Aramco and South Africa’s Central Energy Fund are moving forward with the feasibility study and identifying the parameters of the project,” Falih told reporters in Pretoria, South Africa’s administrative capital.
South African Energy Minister Jeff Radebe said a location for the refinery and petrochemicals plant would be finalized in the coming weeks. The capacity for the refinery is yet to be determined.
South Africa has talked about building an extra refinery for a decade, but it has struggled to agree commercial terms with investors.
It has six refineries, four using crude oil and two synthetic fuel as feedstock. Royal Dutch Shell, BP , Total and Sasol are among major refinery operators.
Al-Falih said Saudi Arabia had held discussions with Ramaphosa’s predecessor, Jacob Zuma, about building a refinery in South Africa but the proposed location was not attractive.
The two governments are now considering Richard’s Bay in KwaZulu-Natal province, home to South Africa’s major coal export terminal, among potential locations for the refinery.
State oil giant Saudi Aramco is also studying whether to use South African oil storage facilities in Saldanha Bay, while Saudi power firm Acwa Power is looking at investing in South Africa’s revamped renewable energy program.
Al-Falih confirmed there were discussions about the kingdom investing in South African state defense company Denel, as exclusively reported by Reuters in November.


Luxembourg welcomes 60 finance firms because of Brexit

Updated 3 min 18 sec ago

Luxembourg welcomes 60 finance firms because of Brexit

  • Landlocked low-tax Luxembourg, a Grand Duchy in the heart of Europe, has a reputation for financial services
  • According to accountants KPMG, Luxembourg has welcomed 65 firms owing to Brexit, ahead of Ireland on 64

LUXEMBOURG: More than 60 financial firms have moved some operations to Luxembourg to insulate themselves from the effects of Brexit, a industry group said Wednesday.
As EU lawmakers voted in Brussels to confirm Britain’s departure from the bloc, public-private agency Luxembourg for Finance released its figures.
According to the group, 60 firms “have publicly announced the relocation of activities to Luxembourg due to Brexit,” and at least ten more will do so.
“Since the Brexit referendum in 2016, Luxembourg has seen a spike in interest from firms planning for their future EU and cross-border activities,” it said.
“A further Brexit outcome has been that Luxembourg law is increasingly being chosen by international institutions active in financial markets.”
The City of London is by all measures the biggest financial center in Europe, and is likely to remain powerful after the United Kingdom leaves the EU.
But the City’s ability to freely provide financial services within the remaining member states will depend on a future cross-Channel trade deal.
This will be negotiated during an 11-month transition period after Brexit, and some firms are already looking to move some or all of their business.
Landlocked low-tax Luxembourg, a Grand Duchy in the heart of Europe, has a reputation for financial services — and discreet bankers.
According to accountants KPMG, Luxembourg has welcomed 65 firms owing to Brexit, ahead of Ireland on 64 and the Netherlands and France on 30 each.
These companies include banks and their departments, insurers and stock brokers shifting operations from the City toward continental locations.
Luxembourg for Finance CEO Nicolas Mackel said the duchy would be “an EU hub for firms considering their post-Brexit plans.”