24 May 2012

South Africa: FG, South Africa Partner On Crude Oil Supplies

Photo: Africa Undisguised
Oil rig in Nigeria.

With the uncertainty over supply of oil from Iran, South Africa is partnering with Nigeria for the purchase of the latter's oil.

South African Deputy President, Kgalema Motlanthe made this known following the signing of a Memorandum of Agreement with Vice President Namadi Sambo yesterday.

South Africa may be forced to comply with a US order to cease buying oil from Iran , from which it sources about a quarter of its oil, or risk economic penalties from America. The Minister of Energy Dipuo Peters last week said government would decide on its response to proposed sanctions by the end of this month.

Motlanthe said PetroSA and private traders were expected to look at supply agreements for oil from Nigeria.

"We would guarantee going forward to our Nigerian brothers (that there will be) demand for their liquid fuel, because we don't want to source our fuel in areas that are likely to be unstable," he said.

"Indeed, we are quite confident that Nigeria will become one of our trusted suppliers of liquid fuel going forward," he said.

Sambo said Nigeria was ready to offer any economic support - be it energy or otherwise.

Motlanthe said the agreement he signed with Sambo would help prepare the way for a more enabling business environment between two of the continent's biggest economies.

He said the agreement enabled both countries to rope in business people from both sides for investment opportunities in both countries.

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