Mobil's exit from SA comes home to roost

THOSE who can remember the withdrawal from the South African market of Mobil Oil, thanks to the pressures of the Reverend Sullivan and the various world anti-apartheid groups, may be permitted a wry smile at the latest news from Mobil's successor in South Africa -- Engen, the company still described by our ill-informed press as an "oil giant".

The news is that the Engen Refinery is down (again) but not to worry, "it should not have a significant impact on the country's fuel supply," according to Herb Payne, Engen's spokesperson/man. Spigot's cynicism (and wry smile) is due to the fact that the Engen Refinery, South Africa's oldest, is well known in the oil industry as being held together with string.

When Mobil retired from the SA market in the 1980s, the decision was hailed as an example of ethical business behaviour (refusing to any longer collaborate with the apartheid regime etc). In fact it was a neat excuse for Mobil to abandon a refinery and infrastructure that was fast reaching its sell-by date. What South Africa was lumbered with is an old refinery that was-- and still is -- in need of massive investment.

Needless to say, neither Engen nor Petronas who were the new owners, have made the cash injection needed, hence, the refinery totters from one crisis to the next.

The moral of the story? Chase out multinational oil companies at your peril. By way of contrast, Shell and BP, who jointly own the Sapref refinery down the road from Engen, have kept their refinery in tip-top condition, their latest investment being R700 million to make Sapref entirely lead-free.

Do BP and Shell get any thanks? What was that? I didn't hear you.