Fit for purpose
BP is one of the world’s largest energy companies. Carrying out oil and gas exploration and extraction, the manufacture and sales of fuels and related products and new low carbon emission technologies, BP is best in class.
BP Southern Africa operates under this global brand in the downstream sector of the industry. It is involved in a joint venture refinery with Shell in Durban, which produces 180,000 barrels a day and supplies the South African inland market. In the African region BP operates in Botswana, Namibia, Mozambique, Zambia, Malawi, Tanzania and Zimbabwe, importing from the Durban refinery, transporting fuels to local depots and then on to customers through some 800 service stations.
Russel Glass, business advisor to BP Southern Africa, outlines the company’s main strengths in the region: “We set ourselves apart from our competition by our integrated approach across the complete value chain. We operate from refining through to the delivery of products to give us economies of scale. Our brand is our core strength and is internationally associated with green, cleaner fuels. BP leads investment into green fuels and as a result we are at the forefront of clean fuel development in South Africa as well. Our key marketing strength is our emphasis on quality across the value chain. From fuel specifications and additive selection through to forecourt service, our aim is to provide the best quality product through the highest quality service delivery possible.”
BP Southern Africa’s refinery in Durban is ideally located for export and import and is at the head of the pipeline network that leads to the inland market. Crude feedstock comes from the Arabian Gulf, as crudes from Nigeria and Angola do not have suitable specifications for the Sapref refinery.
Nevertheless, BP has invested a great deal of money in the development of the Southern Africa oil and gas market. In terms of population Africa is significant but it should be noted that success on the continent is linked to economic growth, which historically has lagged.
However, over the past decade the Southern African market has seen unprecedented growth in the demand for fuels and is now entering a consolidation period. This has spurred investment in the region and upstream BP is expanding rapidly in the Angola offshore area. Downstream, many new ventures are in the planning stages, especially in new Botswana and Zambia mining ventures.
Environmental issues are increasingly pivotal to the oil and gas industry worldwide. This has also been an area of focus for BP Southern Africa. Russel comments: “The Southern African industry implemented an initiative known as Clean Fuels 1 in 2006. This was the first round of cleaner fuel technology introduction. Right now the oil and gas market is looking to move to Clean Fuels 2 by 2015. This will require major new investment and we’ve been engaging with industry and government to negotiate its implementation.
“One of the key criteria is to improve air quality,” he continues. “This implies the need for an overall emissions strategy – as well as investment to make it work. So we are working with the regulatory authorities to establish the roadmap to meet the overall goals of Clean Fuels 2.”
Operating in South Africa is demanding. The regulatory framework and the dearth of skilled workers is challenging, but the country has achieved political stability and major investment in infrastructure, which means that there is every prospect for a successful future.
“BP is developing opportunities in marketing, in retail, commercial fuels and in emerging products such as LPG (liquid petroleum gas). We are extremely positive about our future, especially when taking into account the predicted increase in tourism and the need for aviation fuels,” Russel concludes.
BP Southern Africa
Services: Oil and gas exploration, extraction and sales