On Friday, Minister of Energy Jeff Radebe and his Saudi Arabian counterpart Khalid Al-Falih confirmed the kingdom’s investment in South Africa would be in the form of a new crude oil refinery and petrochemical plant.
According to a statement issued by the energy department, the meeting was a follow-up on progress made since President Cyril Ramaphosa’s state visit to Saudi Arabia in July last year.
Saudi Arabia and South Africa have been in talks regarding the building of a new crude oil refinery and petrochemical plant in South Africa, as part of a broader Saudi Arabian plan to invest as much as $10-billion in the country.
Saudi Arabia announced the investment pledge in July 2018, strengthening already close ties between the Arab Kingdom and South Africa. According to the Department of Energy, Saudi Arabia currently supplies approximately 40% of of South Africa’s crude.
The department of energy said this investment will involve Saudi Arabian Oil Company (Aramco) and South Africa’s Central Energy Fund cooperating to establish the investment terms and a long-term energy partnership.
Aramco is one of the largest companies in the world by revenue, and the most profitable country in the world according to Bloomberg.
Also discussed was the possibility of Saudi Aramco using tanks at Saldanha Bay to store crude oil. Saldanha is a strategic location in terms of both the storage and the trading of crude oil.
“The Ministers also discussed cooperation in Renewable Energy. ACWA Power whose Chief Executive Officer was in the delegation is a significant investor in the Renewable Energy Independent Power Producer Programme in South Africa,” a statement issued by the department of energy reads.
According to Trading Economics, close to 90% of South African imports from Saudi Arabia in 2017 were mineral fuels, oils and distillation products valued at $3.39-billion
Al-Falih reportedly said, “We believe that South Africa will grow economically,” and that additional projects may follow those currently under discussion, suggesting that Aramco could also help supply South Africa with natural gas.