* Energy dept working on “worst case scenario”
* Looking at possible alternative supplies
* Says has not received any formal U.S. request
By Olivia Kumwenda
JOHANNESBURG, Jan 25 (Reuters) – South Africa, which
receives a quarter of its crude from Iran, is assessing a worst
case scenario in which its oil imports from that country might
be halted or cut as a result of widening international sanctions
against Tehran.
Africa’s biggest economy, which has been hit by fuel
shortages in the past because of strikes and refinery problems,
would be hard-pressed to fill any gap quickly. Only Turkey and
Sri Lanka rely more heavily on Iran for oil.
“We have said let’s work on a worst case scenario. In other
words, let’s just assume that we cannot get anything out of Iran
or at a reduced rate, what is going to be the impact?” Nelisiwe
Magubane, director general of South Africa’s department of
energy, said on Wednesday.
The European Union banned imports of oil from Iran and
imposed a number of other economic sanctions on Monday, joining
the United States in new measures.
Magubane said South Africa had not received any formal
request from the United States to halt or reduce Iranian crude
imports. Her comments followed a visit to South Africa last week
by a senior U.S. energy official.
She explained that most South African refineries are
designed to treat Iranian crude and that any adjustment to
handle other crudes would involve a financial cost.
“It is clear that is going to come at a cost to a South
African motorist because the refineries might need to do
amendments to have a different crude oil diet,” she told Reuters
on the sidelines of a carbon finance conference.
Magubane said talks involving the presidency and treasury
department would be held on how to minimise the impact of any
possible change in Iranian oil imports and that alternative
supply sources were under consideration.
U.S. Deputy Secretary of Energy Daniel Poneman said during
his visit to South Africa that Washington had been in talks with
all oil importers to find alternatives to Iranian supply and
would work to avoid any price shocks.
“We … are working with oil consuming countries to help
them respond to the new legislation and find alternatives to
energy supplies from Iran,” Elizabeth Trudeau, spokesperson for
the U.S. embassy in Pretoria, said on Wednesday.
INVESTMENT LINKS
South Africa and Iran also have significant investment
links. MTN Group, Africa’s biggest telecoms company, is
a major player in Iran, where it has over 32 million subscribers
and makes nearly 10 percent of its revenue.
“Our operations are going on as normal, and it’s business as
usual. We have not met anyone from any government, whether it’s
South Africa or the U.S., and we are not under pressure from
anyone,” said MTN spokesman Rich Mkhondo.
South African petrochemicals group Sasol said in
November it had entered talks to potentially divest its
operations in Iran.
The group, which has a U.S. listing, said in a filing to the
U.S Securities and Exchange Commission there was a risk
sanctions might be imposed on it by the United States, the
European Union and the United Nations as a result of its
investments in Iran.
Sasol spokeswoman Jacqui O’Sullivan said on Wednesday that
the talks were ongoing with a number of businesses and
government stakeholders. She also said Sasol was diversifying
its supply base.
“Until recently Sasol Oil has procured a relatively small
volume of Iranian crude oil, around 12,000 barrels per day. This
volume represents roughly 20 percent of Sasol’s crude
requirement for processing at its Natref refinery,” she said.
“In view of recent developments regarding trade restrictions
and possible oil sanctions against Iran, Sasol Oil is
diversifying its crude oil sourcing to mitigate risks associated
with oil supply disruptions from the Middle East.”
Other private companies running refineries in South Africa
include BP, Shell, Total, Chevron
and Engen.
(Additional reporting by David Dolan, Jon Herskovitz and Ed
Stoddard, editing by Pascal Fletcher and Jane Baird)