Riots force Sapref to shut Durban refinery, declare FM

BP and Shell's South African joint venture Sapref has shut its 180,000 b/d Durban refinery and declared force majeure on the supply of all products because of civil unrest sparked by the arrest of former South African president Jacob Zuma.

Protests started in Zuma's home province of KwaZulu-Natal at the weekend and have since spread to other regions including Gauteng, the country's most populous province, and Johannesburg, the country's economic hub. Dozens of people have been arrested after shops were ransacked and offices set on fire.

In a letter to its customers, Sapref said the unrest has disrupted supply routes into and out of KwaZulu-Natal. "Suppliers of materials critical to Sapref operations communicated the disruption of deliveries to the refinery due to safety concerns for their staff and damages to their vehicles on the roads," Sapref said.

It is unclear how long the protests will last and when the normal supply of materials will resume, the firm said. "As a result of the aforegoing, Sapref hereby declares the occurrence of an event of force majeure, excusing Sapref from performing under the agreement."

The refinery produces a full range of fuels, including marine fuel for Durban port, as well as bitumen, base oils and paraffin waxes. A South African bitumen trader said today that Sapref's employees remain safe.

In a separate letter to its customers, Shell said the escalation of the civil unrest across a number of South African provinces has forced it "to stop all manufacturing and logistics operations nationally" as of yesterday. The company said it is unable "to safely secure the movement of people and products across the nation" and will be reviewing the situation on a daily basis.

Capacity crunch

Sapref's refinery had only just resumed fuel supply following a full-scale planned maintenance shutdown that began on 1 May. Bitumen production and supply resumed on 21-22 June. Its closure leaves Sasol and Total's 107,000 b/d Natref refinery in Sasolburg and Sasol's 150,000 b/d coal-to-liquids (CTL) plant at Secunda as the only refineries still operational in South Africa.

The long-term shutdown of Engen's 105,000 b/d Durban refinery and Astron Energy's 110,000 b/d Cape Town refinery, both key bitumen producing facilities, has already led to the rare import of a bulk tanker bitumen cargo to Cape Town in May, with another expected to arrive in late July or August.

By Keyvan Hedvat