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About South Africa South Africa's energy industry

Doing business with SA South Africa's energy sector is critical to the economy,
contributing about 15% to the country's gross domestic product
Investing in South
(GDP).
Africa Thanks to its large coal deposits, South Africa is able to offer cheap
Trade with South Africa electrical power by international standards - the country is one of the
cheapest suppliers in the world.
Economy
Infrastructure South Africa has no significant oil reserves, and relies on coal for
most of its oil production. The country has a highly developed
Key sectors synthetic fuels industry, as well as small deposits of oil and natural
Policies gas.

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Coal accounts for about 75% of primary energy consumption in South
Africa. The majority of this is used to generate electricity, while a Department of Minerals and Energy
significant amount is channelled to synthetic fuel and petrochemical Eskom
operations. PetroSA
Sasol
Iscor's steel plants are the main consumers of domestic coking coal,
together with the synthetic fuel and petrochemical operators. The National Nuclear Regulator
gold mining, cement and brick and tile industries are also large users National Energy Corporation SA
of electricity, generated by steam coal. Central Energy Fund
Nearly a third of production is exported via the Richards Bay coal
Related articles
terminal, the world's largest coal export facility. Europe is the primary
destination. Drilling for gas in W Cape
Sasol and PetroSA are the two major players in the synthetic fuels Govt buildings to go 'green'
market. Sasol is the world's largest manufacturer of oil from coal,
gasifying the coal and then converting it into a range of liquid fuels
and petrochemical feed stocks. Sasol has coal liquification plants at South African households use about 20%
Secunda (oil) and Sasolburg (petrochemicals). of the country's energy.
Since 2000, the company has been investigating the feasibility of Industry, commerce and mining use in
replacing coal with natural gas, based on the high impending capital excess of 50% of commercial energy
investment expenditures in coal mining operations and the high cost while transportation uses a further 27%
of compliance with environmental regulations associated with coal. (mainly liquid fuels).
In terms of agreements between South Africa and Mozambique, Sasol The energy sector contributes about 13%
is required to deliver natural gas from Pande and Temane gas fields to GDP and employs about
in Mozambique, by pipeline, to Secunda in 2004. Construction has

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brain bank. up to 50% of the gas pipeline. 240 000 people.

Oil and gas Source: South Africa Business Guidebook,
Help us market SA In a rationalisation of the state's commercial interests in the oil and
2002/2003
Resources to help you gas sector, Mossgas and Soekor were merged into state oil and gas
promote South Africa. company PetroSA in 2001.

PetroSA converts natural gas into a variety of liquid fuels like petrol,
distillates, kerosene and petroleum gas. In 2001, PetroSA completed
a project to bring the EM gas fields off shore of Mossel Bay on
stream, giving its Mossel Bay plant an additional eight years of gas
life.

Parallel exploration is being carried out in other sections of the

Bredasdorp basin off Mossel Bay, with the aim of assessing the full
extent of these available reserves, and determining PetroSA's
economic potential.

PetroSA operates the Oribi/Oryx oil field, producing 25 000 barrels of

oil a day, and brought the Sable oil field - 150 kilometres southwest
of Mossel Bay - on stream in 2003.

South Africa's prospects for natural gas production were also boosted
in 2000 with the discovery of offshore reserves close to the Namibian
border. The reserve, named the Ibhubezi Prospect, contains proven
reserves of 0.27 to 0.3 trillion cubic feet of hydrocarbons.

US-based companies Forest Oil Corporation and Anschutz, along with

local empowerment firm Mvelaphanda, are exploring the Ibhubezi
field. PetroSA bought a 30% share in the Ibhubezi project in 2003,
with an eye to using Ibhubezi gas, along with gas from Namibia and
Mozambique, at its Mossel Bay plant.

Exploratory drilling was completed in late 2004, with the consortium

hoping to begin production in 2006.

South Africa has a well-developed refining and downstream oil sector

and is one of the major refining nations in Africa. The country's crude
oil refining capacity is 466 547 bbl/d. Products are sold in local
markets and exported, mainly to East Africa.

Multinational companies in South Africa include Shell, BP, Caltex and

Total Elf Fina. A number of these companies have struck deals to
bring black empowerment companies in as minority shareholders.

PetroSA manages South Africa's strategic stocks of crude oil, includes

the Saldanha Bay oil storage facilities, one of the largest in the
world. South Africa imports crude oil primarily from the Middle East,
and is trying to reduce its dependency on Iran by increasing imports
from Kuwait, UAE, Saudi Arabia and Nigeria.

Electricity
Eskom, a parastatal, generates 95% of the country's electricity, as
well as two-thirds of the electricity for the African continent, and

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owns and operates the national transmission system.

Eskom's network is made up of more than

300 000km of power lines, 27 000km of which constitute the national
transmission grid. The main generating stations are located in
Mpumalanga, where there are vast coal reserves.

Electricity is primarily coal-fired (92% of SA's electricity is produced

from coal); there is one nuclear power station (Koeberg), two gas
turbine generators, two conventional hydroelectric plants and two
pumped storage stations.

Eskom exports power to Botswana, Lesotho, Mozambique, Namibia,

Swaziland and Zimbabwe. Eskom's campaign to improve the
availability of its existing hydro-power plants, coupled with the
possible advent of gas and further hydro-power generation, has
deferred the need for new coal generating plants.

New generation sources will not be required before 2007, and

possibly only in 2010. A limited number of large industries generate
their own electricity. The first private player in the industry is the US'
AES Corporation, which bought 50% of Johannesburg's Kelvin power
station in 2001.

Nuclear energy
Nuclear energy does not play a major role in South Africa - accounting
for about 3% of all energy - but is being investigated as a future
potential energy source and alternative to coal.

South Africa serves on the board of governors of the International

Atomic Energy Agency, as it is the most advanced African country in
the field of nuclear technology.

SouthAfrica.info reporter

Published for Brand South Africa by Big Media Publishers

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