PetroSA has announced that it plans to build a new oil refinery at Coaega in the Eastern Cape, South Africa
The project which is also known as Mthombo is expected to be one of the biggest on the continent, PetroSA revealed.
Despite the South African government's arguement that the country needs local sources of additional diesel and petrol, the new chairman at the local unit of Chevron Shash Rabbipal is opposed to the idea.
According to Rabbipal, the six oil refineries in South Africa including Chevron’s Cape Town facility, produce a combined 703,000 barrels of crude oil per day.
“Should another refinery be built, it will mean that the country will have to increase its exports of products and this would mean a change from the current practice of ensuring that supply catered mainly for local demand,” Rabbipal stated.
PetroSA reported a US$1bn loss for the financial year ended March, according to PetroSA's annual report, which noted that new measures were needed to ensure the business continues.
"Should Project Mthombo go ahead it will have a huge impact on production at other refineries and the local economies they operate in," added Rabbipal.
