SAPREF suspends operations

SAPREF, a joint venture between BP Southern Africa and Shell Refining SA, will be suspending production from the end of March 2022 for an indefinite period. In a joint statement released on 10th February, the co-owners announced a halt to further investment, with a sale deemed the preferred option for the refinery's future. Situated at the port of Durban, SAPREF is the largest of four refineries in South Africa, accounting for 35% of South Africa’s refining capacity. It is Africa’s most complex refinery, producing lubricating oils, solvents, bitumen and chemicals feedstocks in addition to transport fuels. The decision to suspend production comes despite net-positive margin in a challenging refining environment. This Insight explores the rationale behind the announcement and what this means for South Africa's refining landscape.