/ 5 July 2012

Energy minister warns oil companies about black ownership

Energy Minister Dipuo Peters is not impressed with oil companies' black ownership compliance.
Energy Minister Dipuo Peters is not impressed with oil companies' black ownership compliance.

Peters on Thursday warned companies could lose their operating licences if they failed to make up ground.

Under the Petroleum and Liquid Fuels Charter of 2000, companies committed to achieve 25% black ownership by 2010 to boost the participation of blacks in the Africa's biggest economy.

But Peters said an audit had found the average black shareholding was 18.9% instead of the mandated 25%. Only Total had fully complied with this ownership obligation.

"Overall the findings of the audit are extremely disappointing," Peters told journalists.

Other firms active in the industry include South Africa's state-owned PetroSA, Shell, BP, Chevron, petrochemicals group Sasol, and Engen, majority-owned by Malaysian state oil group Petronas.

Peters said there was only 48% compliance with the charter, which also set targets on management control, oil procurement, skills development, participation of women, access to joint infrastructure and retail networks, among others.

The minister said she would meet with the companies to set agreed deadlines for them to meet these targets. She could not specify how much time they would be given.

But she warned that companies continuing to violate the charter could lose their licenses or have their activities curtailed, such as limiting their crude imports.

South Africa is a net importer of fuel and any disruption to refining activities and crude imports could hit supplies of fuel. South Africa suffered shortages last year because of strikes and refinery problems.

Peters told the companies not to try to argue over a potential risk of fuel shortages in order to delay action.

"We will not be held to political, financial or economic blackmail," she said.

Deputy director general of the department of energy Tseliso Maqubela added any negative impact from such punitive measures on the country would be short-lived and alternative suppliers would be found if needed. – Reuters