SA to get R5 billion investment from BP

During his visit to South Africa, Conn said that the group was committed to pursuing operations and investments across Africa. In upstream, it is pursuing opportunities in Angola, Algeria, Namibia, Libya and Egypt. In downstream, beyond today's announcement about South Africa, it is also making investments to improve and upgrade the fuel import infrastructure in neighbouring Mozambique.

In South Africa, the investment will be spent on various projects across the fuels value chain, including refinery, terminal and retail network assets. This is a sign of its growing confidence in the South African economy as an attractive investment destination especially after the adoption of the National Development Plan (NDP) as the road map for the country.

SAPREF to get half

Conn stated that around half the investment will be spent in upgrading and modernising the refinery infrastructure at SAPREF, a joint venture with Shell. The infrastructure upgrade will primarily be to comply with South Africa's proposed clean fuels requirements.

In February 2013, the South African Minister of Finance, Pravin Gordhan announced the support mechanism for biofuels and upgrade of refineries to encourage South Africa to produce cleaner fuels, which are environmentally friendly.

"We anticipate that the remuneration mechanism will be finalised shortly as we have already started to invest in the project and our intent is to be ready to produce clean fuels in 2017," said Conn.

Part of the R5 billion investment is aimed at building and upgrading terminals to world-class facilities that are leading the industry in terms of safety, operational integrity and technology. Its investment will also ensure greater security of supply. An example of this investment is the new and recently commissioned facility built at Alrode outside Johannesburg, in partnership with Sasol. Once completed, this terminal will be the most modern and technologically advanced in Africa with high safety management systems and standards.

Retail upgrades

BP's retail network will benefit from the announced investment, which will improve customer experience. The conversion to a 'best in class' convenience retail offering, in partnership with Pick n Pay, will see 120 Pick n Pay Express stores opened in the next five years across South Africa. Coupled with improvements to the Express convenience offering, the fuel forecourts will be upgraded with a standardised look.

Conn emphasised that the group's commitment is not only about the capital and commercial investment, it is also about being part of a South African community and continuing to contribute to the improvement of people's lives through a focused transformation programme, aligned with government's goal to create jobs, develop skills, build entrepreneurs and achieve sustainable economic growth.

"This is part of our on-going efforts to be a good corporate citizen as we pursue our business objectives in all the markets in which we operate."

Transformation objectives

The company has been at the forefront of transformation over a number of years. In 2001, it became one of the first companies to form an empowerment initiative and this has resulted in cash pay-outs to BEE shareholders of R300 million.

Subsequently, Masana, a joint venture between the company and its BEE partners, was formed in 2005, an empowerment success story that has doubled its growth since inception.

It continues on its transformation journey with the latest hydrocarbon (crude oil) procurement initiative, which invited and encouraged local previously disadvantaged enterprises to participate in a tender process.

A long-standing support for skills development and quality education continues to be at the cornerstone of its involvement in high school enrichment programmes, artisan to PhD support programmes and general industry skills development for the previously disadvantaged. To this end, the company, as part of the South African Petroleum Industry Association (SAPIA), is involved in an industry-wide skills development initiative that will culminate in the Petroleum Institute that will assist the Southern Africa region.

"The investments we are making in South Africa are not only a sign of confidence in the policy direction the country is taking, but they are also our commitment to all South Africans through the successful development of the energy infrastructure, market and associated skills and opportunities," Conn concluded.