Johannesburg — GROWTH in demand for oil products in SA is likely to drive southern Africa's downstream market for petroleum products, according to consultants Frost & Sullivan.

The expected buoyancy of the South African market could be the reason petroleum giants BP and Shell have left their South African downstream assets untouched, while deciding to divest from several African countries.

The downstream sector is the refining of crude oil, and the selling and distribution of natural gas and products derived from crude oil. It includes retail outlets.

Frost & Sullivan said yesterday that the revival of the global economy had led to an rise in demand for oil products in southern Africa. It said exploration initiatives in Angola would stimulate the upstream oil and gas market. The upstream market refers to the search for, and recovery and production of, crude oil and natural gas.

"Growth in the downstream market of southern Africa, however, will continue to be primarily driven by the growth in demand for oil products in SA ," Frost & Sullivan energy analyst Ross Bruton said yesterday.

Frost & Sullivan said SA represented 80% of the region's refining capacity, and old and damaged infrastructure hindered downstream operations in southern Africa.

"Underdeveloped and neglected road networks increase the logistical costs of fuel transport, increasing retail costs," Mr Bruton said. BP and Shell's decision to divest from certain African countries created space for new players, he said.