REUTERS, Cape Town | Wednesday
THE South African oil industry is just months away from starting to hand over 25% of its assets to black-owned businesses, says Energy Minister Phumzile Mlambo-Ngcuka.
Mlambo-Ngcuka told a news conference she expected black empowerment deals to cover the whole range of the industry, including the mooted state oil company if it is formed, but refused to reveal any details of the expected deals or to put a price on 25% of the assets of the country’s oil industry.
She said the sale of one quarter of the industry’s assets should be completed within a decade, adding that the oil companies themselves should help the empowerment firms secure the necessary funding.
Should any of the empowerment companies at some stage choose to sell off their oil industry holdings, the government would be the buyer to avoid white business simply regaining control of its former assets, the minister said.
“Each company has applied its mind. They are talking to their preferred partners,” she said. “I expect some developments to start early in the new year.”
On top of the requirement for one-quarter of the industry changing hands, oil companies would also be required to buy one-quarter of their procurement expenditure through black-owned companies, she added.
South Africa floated the idea that black economic empowerment companies should take one quarter of the oil industry, from exploration to the forecourt, in its energy white paper two years ago.
But little material progress has been made since then as the oil industry attempts to bargain its assets against deregulation. However, Mlambo-Ngcuka’s declaration indicated that the long gestation process is close to a conclusion.