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BUILDING a new crude oil refinery would be in the best interests of South Africa, state-owned oil company PetroSA said yesterday.
"Though we recognise that BP might not be comfortable with fresh competition, building a new crude oil refinery would certainly be in the best interests of South Africa," PetroSA president and chief executive Sipho Mkhize said.
Last week, BP called for all options to be considered before PetroSA built the new 400000 barrel-a-day oil refinery - known as Mthombo - at Coega, in the Eastern Cape.
Mkhize said the new refinery was in line with the government's energy security master plan introduced in 2007 "after South Africa experienced a near-disaster in fuel supply shortages during December 2005".
At the time, the cost to the country was estimated at R1billion a day, Mkhize said.
PetroSA's business proposal to develop Project Mthombo had not been a product of haste, he said.
He said the feasibility study confirmed that Project Mthombo was strategically important, technically feasible and commercially viable.
Mkhize said upon completion of the front end phase in early 2012, a recommendation would be made for the final investment decision.
He emphasised that the motivation for a new refinery was built on commercial and strategic considerations.
A new refinery would provide thousands of new jobs and contribute significantly to the economic upliftment of the Eastern Cape region, Mkhize said.
The refinery was a catalyst for introducing clean fuels in South Africa, and would play a major role in the transformation of the oil industry.
Mkhize said it was "understandable" why BP would prefer Mthombo not to become a reality.
"It would mean that South Africa would remain increasingly reliant on imported product, leveraging the global assets and trading activities of BP," he said.
"It also means that profit generated in the regulated South African market is not re-invested, to any major extent, in the country."
He added that this was clearly not in South Africa's best interests.
"Project Mthombo's development has been an open, transparent and inclusive initiative during which PetroSA has, on numerous occasions publicly invited the local International Oil Companies to participate in the venture," he said.
"A few, unfortunately not BP, have shown interest in this invitation that includes exploring synergies between Mthombo and the existing local refineries."
BP chief executive Sipho Maseko could not be reached for comment yesterday. - Sapa