THAT ENGEN FIRE and other matters

Engen refinery head honcho, Willem Oosthuizen, has been drawn on the possibility of shifting the plant (or some of it) or expanding it to the land that will be made available once Durban's airport shifts to La Mercy by 2010. Building a completely new one, he said was not possible because building a new refinery would cost between R15-billion and R20-billion. Hm... that should make the Richards Bay and Coega wannabee refiners sharpen their pencils. Or, are we actually all looking at Government in some shape or form to come to the party -- as was the case with Sasol and Mossgas? Watch this space taxpayers! Sasol has already twisted the Government's arm over the Waterberg (or Free State ) expansion. Once a subsidised entity, always a subsidised entity. So much easier than risking your own money.

THE SKY IS FALLING IN …THE SKY IS FALLING IN…

THE USUAL hysterical media reaction to the two recent fires at petroleum storage facilities in Durban … speculation that we would run out of petrol over Christmas (no we won't -- at least not because of these fires) … nearby residents being dramatically taken to hospital with respiratory problems (followed closely by certain kinds of lawyers, no doubt)... the usual, smoozle. Anything to have a go at the oil industry,. Spigot would like to remind people that in the case of the Engen fire, it was lightning that caused it, a.k.a. an Act of God, so good-bye law suits. By the way, the Engen Refinery is the oldest in the country and probably would have been kept in better repair had it not been abandoned when previous owner Mobil skipped the country, thanks to anti-apartheid pressures. The people claiming to be affected by smells and what not from the Engen Refinery were placed there AFTER the refinery was built. One other thing, both the Engen Refinery and the Sapref Refinery will probably have to expand once the airport is moved away in time for 2010 and the world cup. This expansion will be cheaper and quicker than all the other fancy, pie-in-the-sky plans for new refineries in Richards Bay, Coega, the Waterberg and so on, and so forth. Judging from the time it takes to get the National Energy Regulator to approve things, it may well turn out to be the only way we are going to supply enough petrol and diesel fuel in 2010.

HERE COME THE INDIANS!

NEWS that Reliance Industries of India has bought a majority stake and management control of East African oil retailer, Gulf Africa Petroleum Corp (GAPCO) should make BP Tanzania consider their options. The good old days of an almost captive market and an overwhelming BP majority of market share have long gone, but, with demand for petroleum products rising quite rapidly in East Africa, the temptation to say, "Stuff it" and get out of Tanzania altogether may not be the no-brainer it once seemed. Even so, Reliance as an alternative refiner to Sapref will offer severe competition. For one thing, the East African markets are within easy reach of India. For another, GAPCO owns and operates large storage terminals and has a retail network in Uganda and Kenya as well as in Tanzania. Reliance is India's largest private company. It operates a 660 000 barrels a day refinery (bpd) and is building another of 500 000 bpd unit. Come to think of it -- and given the hassles of operating in Tanzania -- why not say, " Stuff it" after all, and flog the lot to Reliance (including that old albatross of a refinery in Mombassa)? Are you listening Mr Hayward? This could be your chance to extract BP from that dangerous place called Africa. Less hassles from the Safety Nazis. Less chance of another Texas City or Alaska pipeline spill. Might even be able to dress up a sale as empowerment. Gosh!