Leading Russian bank intends on recovering South African refinery operations
Date
5/28/2024 8:40:46 AM
(MENAFN) South Africa's national oil company, PetroSA, and Russia's Gazprombank are conducting a feasibility study to revive gas-to-liquid (GTL) refinery operations at a plant in Mossel Bay, according to a Bloomberg report on Monday. Nonny Mashika-Dennison, a spokeswoman for PetroSA, stated that the study would consider all factors affecting the viability of restarting the refinery.
In December, PetroSA selected Gazprombank Africa as its preferred investment partner for the project, a decision supported by the South African government despite potential complications arising from Western sanctions. Gazprombank, Russia's third-largest bank and a significant player in Moscow's energy trade, has been sanctioned by the UNITED STATES and other Western nations due to the conflict in Ukraine.
Both South Africa and Russia are members of the BRICS alliance, which also includes Brazil, India, China, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. In response to pressure from the UNITED STATES and its allies following the Russia-Ukraine conflict, South Africa has maintained a neutral stance. This nonalignment could expose the country to secondary sanctions if it engages with sanctioned Russian entities.
Before finalizing the agreement with Gazprombank, PetroSA officials consulted legal advisors to mitigate the risk of secondary sanctions. Despite these precautions, PetroSA’s acting chief operations officer, Sesakho Magadla, asserted that "these sanctions are not applicable to South Africa." The project is expected to cost approximately USD200 million.
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