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Send  Share  RSS  Twitter  21 Sep 2011

EXPLORATION: More Shell Shocks In Karoo


Recent Western Cape Business News

SINCE reporting last month (Frack the Karoo: Why Shell will win) by Cape Business News, some more disturbing information has been uncovered on the very questionable relationships between Shell SA, the government’s ruling party the ANC and its state owned enterprise, PetroSA.

PetroSA, as is well known, is the owner and operator of the Mossgas refinery, which uses the (natural) gas-to-liquid process to produce various kinds of petrochemical fuels. PetroSA has no more gas to speak of off-shore and will be looking eagerly to the gas that Shell can supply from its shale gas exploration in the Karoo.

In fact, PetroSA desperately needs the gas for it can be a truly lucrative opportunity moneywise, as it will no doubt be for Shell SA.

How freely money flows between PetroSA and the ANC was exposed by the Mail & Guardian in 2005 when it showed how the company had channelled R11 million to the ANC for its April national election campaign the previous year. The ‘donation’ subsequently had opposition MPs up in arms in Parliament, but nothing came of it.

More intriguing is Shell SA’s relationship with the ANC. Shell literature boasts about its strong black empowerment credentials, but that empowerment looks as follows; Thebe Investment Corporation holds a 25% interest in Shell SA Marketing, which it acquired in 2002. It also has a 25% interest in Shell SA Refining, purchased in 2008.

(Shell SA Marketing includes all Shell’s retail and commercial marketing operations including fuels, lubricants, marine and aviation fuelling, bitumen, storage and handling. Shell SA Refining comprises Shell’s refining business in which Thebe is a 25% shareholder. Shell owns the remaining 75% of the company. Shell SA Refining has a 50% interest in the 180 000 barrels per day Durban-based refinery, SAPREF.)

At what monetary consideration were these deals struck? Shell spokesman Kim Bye Bruun tells CBN “the price and details of the financing structure are confidential”. One could easily speculate that it was effectively a gift, perhaps in exchange for some future favours.

But here is the interesting thing; Thebe Investments was founded in 1992 by the Batho Batho Trust as an ANC investment company. This puts the Shell/Thebe (read ANC) debacle in perspective and the millions the ANC stands to make from the Karoo deal.

Last month geologist and Karoo expert Doug Cole of the Council for Geoscience at a conference in Cape Town said that the natural (shale) gas from the Karoo could foresee in South Africa’s requirements for “probably several hundred years”. What a nice trough for the ANC to sip from.

To cap it all, Shell believes SA would be ‘stupid’ to ignore Karoo shale gas opportunities, as explained by Shell SA’s chairman Bonang Mohale, speaking last month at the SA National Energy Association, held in Cape Town.

Concerns and complaints about the environmental impact of ‘fracking’ continues, but the monetary gains to be made by the ANC, PetroSA and Shell are still over-riding.


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