Oil and gas

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Oil and gas
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Oil and gas
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Cape Town is well positioned geographically to service the offshore oil and gas industry, and provides a gateway to this sector on the African continent.

Saldanha Bay is the site of the country’s largest oil-storage facility

Two of the four main oil refineries in South Africa are located in the Western Cape

The oil and gas sector is the fastest-growing sector in South Africa, and the Western Cape is ideally placed to service growing demand.

The three ports in the province – Cape Town, Saldanha Bay and Mossel Bay – are ideally located to take advantage of this growth, playing a key role in this industry, and they are being expanded and upgraded to support the industry.

A vast amount of investment in explorations of South Africa’s offshore blocks presents a massive opportunity and competitive advantage for the industry in the province. PwC estimated (in 2013) that more than $1-billion had already been spent on oil and gas explorations, with investment to continue.

Africa produces eight million barrels of crude oil per day, equating to 10% of the world’s production. With its links to West Africa, well-developed infrastructure and cost-effective engineering capability, the Western Cape has attracted many international exploration and oil-refining organisations to its shores.

PetroSA, the national oil company, maintains six oil-storage tanks in Saldanha Bay, each with a capacity of 1.19-million cubic metres. PetroSA’s gas-to-liquid refinery in Mossel Bay is South Africa’s leading facility with a capacity of 36 000 barrels per day – equivalent to 45 000 barrels of crude oil per day.

The Western Cape is also home to a resource of shale gas in the central Karoo.

The province’s strong regulatory environment, its well-developed infrastructure, attractive local incentives and cost-effective engineering abilities have attracted many international exploration and oil-refining organisations to its shores.

The region is ideally placed to be a hub for oil and gas, because of the ready availability of the required skills and the abundance of suppliers, as well as the specially designated Saldanha Bay Industrial Development Zone and the Atlantis Special Economic Zone.

Saldanha Bay port is the first free port in South Africa, allowing duty-free and VAT-free entry of foreign goods intended for export. It is also home to the key Saldanha Bay Industrial Development Zone.

It is the deepest natural port in the southern hemisphere, and the iron-ore export quay provides berthing for very large bulk carriers.

Saldana was also identified as the site to establish a fully functional world-class upstream oil and gas hub, and provides servicing and support for vessels.

The industrial zone was established in 2013.

Cape Town and the Western Cape are ideally located to be a launch pad for the oil and gas sector in the rest of Africa.

The government has invested heavily in the development of the energy sector, by creating incentives such as the 12I tax allowance to stimulate large capital projects, the anticipated development of an off-shore supply base, and the oil and gas industrial development zone in Saldanha Bay.

French fuel company Total announced early in 2019 that it had discovered gas condensate at its Brulpadda well in the Outeniqua basin about 275km south of Mossel Bay. The company estimated the well could yield a billion barrels of the light liquid hydrocarbon.

US oil company Exxon Mobil and the Italian Eni SpA group also have stakes in the Mossel Bay area.

The Western Cape has companies with the capacity and capability to assist these offshore operations and others.

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The Wesgro Investment Promotion Unit provides a free and confidential service to help you establish and grow your business in Cape Town and the Western Cape. Our team of expert Portfolio Managers have more than 40 years of combined experience in supporting new investors commercialise their businesses in the region, and in helping established businesses grow and expand.

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