BP, Shell to study hydrocarbon potential at three Libyan oilfields
Libya, Africa's second-largest oil producer and a member of the Organization of the Petroleum Exporting Countries (Opec), has suffered from disruptions to its oil activities due to disputes between armed rival factions over oil revenues that have often led to oilfield shutdowns.
Foreign investors have been wary of putting money into Libya, which has been in a state of chaos since the overthrow of Muammar Gaddafi in 2011. However, oil giants like Eni, OMV, BP, and Repsol resumed exploration activities in Libya last year after halting them for a decade.
BP will reopen its office in the capital Tripoli during the last quarter of 2025, NOC said in its statement on Monday.
It also said it signed a memorandum of understanding with BP to conduct studies to assess the potential for hydrocarbon exploration and production in the Messla and Sarir oilfields, as well as in some surrounding exploration areas.
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TimesLIVE
11 hours ago
- TimesLIVE
BP, Shell to study hydrocarbon potential at three Libyan oilfields
Oil Majors BP and Shell have made agreements with Libya's National Oil Corp (NOC) to conduct studies for hydrocarbon exploration and development at three Libyan oilfields, NOC said on Monday. Libya, Africa's second-largest oil producer and a member of the Organization of the Petroleum Exporting Countries (Opec), has suffered from disruptions to its oil activities due to disputes between armed rival factions over oil revenues that have often led to oilfield shutdowns. Foreign investors have been wary of putting money into Libya, which has been in a state of chaos since the overthrow of Muammar Gaddafi in 2011. However, oil giants like Eni, OMV, BP, and Repsol resumed exploration activities in Libya last year after halting them for a decade. BP will reopen its office in the capital Tripoli during the last quarter of 2025, NOC said in its statement on Monday. It also said it signed a memorandum of understanding with BP to conduct studies to assess the potential for hydrocarbon exploration and production in the Messla and Sarir oilfields, as well as in some surrounding exploration areas.
Daily Maverick
a day ago
- Daily Maverick
The consultants who supported CEF's Sapref oil refinery gambit
Consultants downplayed previous warnings given to the Central Energy Fund about the purchase of Sapref's oil refinery in South Durban, which has serious implications for the state and the public. When the Central Energy Fund (CEF) purchased the South African Petroleum Refinery (Sapref) refinery from fossil fuel giants Shell and BP in May 2024, major red flags were raised about the viability of the purchase. CEF bought the refinery anyway, and on a problematic 'clean break' principle. This let Shell and BP off the hook for the significant environmental and other liabilities that come with the refinery. Now, CEF and the broader public are on the hook instead. In the first article in this series, we showed that CEF's decision to go ahead with the purchase seemed to ignore important parts of the due diligence that CEF initially received in 2021 and the risks that had substantially increased since the devastating floods in KwaZulu-Natal in 2022. Now, we turn to the consultants that gave CEF advice and appear to have pushed the transaction over the line: CLG (formerly the Centurion Law Group) and Mazars. Their later advice downplayed previous warnings given to CEF about the purchase, which has serious implications for the state and the public. Given these implications and risks, the question at hand is why the board of CEF did not heed the earlier warnings. CLG and Mazars' advice in 2023 The documents provided to Open Secrets by the Organisation Undoing Tax Abuse (Outa) reveal that CEF initially received advice from Mazars, the lead transaction adviser, as well as Ceris Engineering and law firm Fasken. Together, the advice highlighted the significant liabilities that any purchaser of Sapref would take on and warned against allowing Shell and BP to walk away without paying towards these. These were discussed in detail in the first article. However, the transaction advice provided by Mazars and CLG after the KZN floods told a different story. For instance, the 2021 due diligence undertaken by Certis Engineering estimated decommissioning costs of the refinery were around $374-million (R6-billion). Its advice was that 'the Buyer [CEF] should ensure that at least $374m is provided for before giving the Seller a clean break ' (emphasis added). The 2021 advice from Mazars also used this figure as the estimated decommissioning liabilities. In 2024, Shell and BP paid just R335-million to cover some employee and operational costs as part of the final deal and walked away with a 'clean break', exempting them from any decommissioning costs. We asked Shell and BP what they had estimated as the decommissioning costs of the refinery, as well as the amount that they ended up paying to CEF, but they declined to comment, citing confidentiality. Without any explanation, the 2023 transaction advice from Mazars and CLG suddenly estimated that the total liabilities associated with the refinery were only R1.6-billion – including both soil and groundwater remediation, and decommissioning costs. There is nothing in the documents explaining how the full liabilities were now only around 25% of the initial 2021 estimates of only the decommissioning costs. We asked Mazars to explain the change in the estimates, but they did not respond to Open Secrets' questions. This is particularly confusing given the extensive damage done in the 2022 floods. However, using this figure allowed Mazars to state that the purchase would result in a net asset value (NAV) of R1.1-billion. The other notable difference in the 2023 advice from Mazars is that there is much less detail provided about the economic risks facing the future of the refinery sector, including the threats posed to its viability by the electrification of the transportation sector. This is a notable omission because, in the intervening period, the South African state had made new energy vehicles (NEV) a 'priority area' in terms of South Africa's Just Energy Transition Investment Plan (JET IP). The initial due diligence said any significant shift to NEV vehicles risked making Sapref a stranded asset very quickly. The advice received in 2023 aligned more closely with CEF's existing narrative – focusing on the strategic value of reducing fuel imports to South Africa, noting that 'opportunity has arisen [for CEF] to become an influential player in liquid fuels'. It repeatedly stresses the growth in fuel imports and the strategic importance of securing supply locally. The document makes no mention of a 2022 warning from the South African National Energy Association (Sanea) that the arguments around security of supply were no longer applicable given the global refining market, also arguing that the refinery could become a stranded asset in as little as 10 years. There were also apparent errors in the 2023 advice. For example, it stated that the refinery's operations 'currently contribute R45-billion to GDP' and 'sustains 780 direct jobs' and up to 85,000 people through contractors, indirect, and induced jobs. It is not clear how these figures were calculated given the refinery had been shut down and underwater for several years. In fact, Sapref had undertaken mass retrenchments and no maintenance. Yet despite downplaying the economic risks and talking up the future positive impacts of the Sapref refinery, even the 2023 Mazars/CLG advice did not totally ignore the risks of taking on the refinery's liabilities on the 'clean break' principle. It labelled the risk of this as 'high' and noted that CEF should either obtain third-party insurance against possible future claims and liabilities or establish a dedicated separate fund for these future risks. In line with the earlier legal review from Fasken, Mazars noted that one of these risks was class action claims in the future by communities near the refinery. It warned the CEF that the claims could be 'exorbitant and far-reaching', citing the R5-billion silicosis class action case that was settled in 2016 and noting that BP and Shell had refused to include these types of claims in the sale and purchase agreement (SPA). Despite these warnings and the host of other concerns raised in the earlier due diligence, it was announced that CEF had purchased Sapref a mere month after Mazars and CLG presented this advice to CEF's board in April 2024. A problematic partnership seals the deal There is one other notable way that the Mazars transaction advice documents from 2023 differ from those in 2021. At the end of the slides provided in 2023, there is a contact person listed from another organisation; CLG, formerly the Centurion Law Group. The later transaction advice given to CEF by Mazars lists two contact people: Taona Kokera, a director at Mazars, and Oneyka Ojogbo, a director and lawyer from consulting firm CLG. Mazars acted as the lead transaction adviser from 2021 through to its completion, and there is only one other mention of CLG in the documents that Open Secrets has access to: in a number of comments made in track changes on the draft Sale and Purchase Agreement (SPA) between BP, Shell and CEF dated 2 May 2024, a couple of weeks before the purchase was announced. Founded by prominent oil and gas lobbyist NJ Ayuk, who has since stepped down as CEO, CLG is often referred to in the media as a 'South African legal firm'. However, it is not registered with the Legal Practice Council and is more accurately understood as a typical professional services firm that provides a broad range of consulting, legal and other services under one roof. CLG has 25 offices and more than 300 attorneys and 'business advisers', with major offices in nine African countries, including its Sandton office in South Africa. CLG describes itself as an 'undeniable leader' in oil and gas development. Its office at Suite 43, Katherine and West, in Sandton, is the same address linked to the African Energy Chamber (AEC), where Ayuk is chairperson. The AEC is overtly an oil and gas lobby organisation aiming to attract investment and build capacity in the oil and gas sector across Africa and hosts the annual 'African Energy Week' in Cape Town, focused on developing the oil and gas sector across the continent. There is also a notable South African political connection in the AEC. Nosizwe Nokwe-Macamo is on the advisory board, and sits on the 'Local Content Committee', 'Investment Committee', and 'Natural Gas Committee' of the advisory board. Nokwe-Macamo was the CEO of PetroSA for three years between 2012 and 2015, but was suspended and ultimately left after the state-owned entity posted a nearly R15-billion loss in 2015. In 2024, she made a return to state-owned oil and gas when she was appointed by Gwede Mantashe to the board of the brand-new South African National Petroleum Corporation (SANPC). It is unclear when exactly CLG was contracted to work on the project, but the advice that it contributed to was certainly more supportive of the decision to purchase the refinery and more bullish on the future of the oil refinery business. Their advice on this transaction also overlapped with the period Mazars and CLG were giving dubious advice to CEF's then subsidiary – PetroSA – on a separate oil and gas deal. In February 2025, amaBhungane revealed that Kokera had led the Mazars team that gave the green light to three dubious deals between PetroSA and Gazprom, and PetroSA and Lawrence Mulaudzi. Mazars was brought on to advise on the deal in September 2023 and provided a final due diligence report in October 2023. The due diligence labelled Mulaudzi as a 'low-risk' partner, despite publicly available information that he had been involved in alleged corruption in his own business dealings. The PetroSA deal fell apart in June 2024 after Mulaudzi and EquaTheza failed to provide the R227-million that was promised. Mazars has come under fire for its involvement in this deal for several reasons. The final due diligence report it provided was insufficient and left out crucial details it had identified in earlier due diligence about the risks associated with Mulaudzi, his company Equator Holdings, and the financial and technical capabilities that EquaTheza had to take on a project of this nature. Mazars has denied any wrongdoing. Additionally, Mazars was also accused of overcharging PetroSA for the work it did. Mazars had sub-contracted CLG in its work for PetroSA, and Ojogbo had billed as if she had worked on the project from 8am to 7pm every day of the week for two months, charging R4,160 per hour. PetroSA's internal audit team alleged that Ojogbo and Mazars had engaged in 'double dipping'. PetroSA has since written to Mazars, demanding a refund of just over R1-million, but it is unclear whether this has happened. Additionally, the audit team raised questions around Mazars' potential blacklisting by National Treasury for future business with the state if Mazars had, in fact, overcharged and underdelivered. PetroSA's internal audit team also pointed out that CLG had an obvious conflict of interest. In advising PetroSA, they would draft contracts and undertake due diligence on Mulaudzi and his companies. Yet Equator's bid to PetroSA listed CLG as its partner. Mazars and CLG – led by Kokera and Ojogbo – were thus advising CEF on its decision to purchase the Sapref refinery at the same time as providing advice to PetroSA which has since been called into serious question. Both Mazars and CLG failed to respond to detailed questions from Open Secrets regarding the due diligence, the discrepancies in the transaction advice provided to CEF in 2021 and 2023, and their views on the serious concerns raised by other firms in the due diligence process. CEF board signs off and then stalls Regardless of the motivations of those providing the advice to CEF, its board – chaired by Ayanda Noah – still had the responsibility to carefully apply its mind to all of the advice before making the decision to purchase the refinery and on what terms. The scramble to create the South African National Petroleum Company (SANPC), a merger of CEF's subsidiaries – PetroSA, Strategic Fuel Fund and iGas – to spur investment in the country's oil and gas sector has also been a large factor behind the acquisition of Sapref. While it is speculative, it may be that the desire to rapidly consolidate the SANPC and expand its operations led the CEF board to gloss over the very real consequences of purchasing a defunct refinery, taking on its enormous liabilities and the myriad risks identified in the due diligence phase. Despite the more positive tone of the later advice from Mazars and CLG, it still called for further due diligence and a 'comprehensive review of financial records, legal documents and environmental assessments'. Crucially, the CEF board motivated to proceed with the sale just one month after receiving this advice, insufficient time for a further comprehensive due diligence process. Open Secrets sent detailed questions about the transaction to both the Central Energy Fund and Department of Petroleum and Mineral Resources but received no response from either. Since the purchase, CEF and the SANPC (now officially in operation and staffed) have argued that the rehabilitation of the refinery is the answer to national energy security and job creation. They have repeatedly indicated their aim to increase the refinery's capacity from 180,000 barrels per day to 600,000 barrels (bbl) per day, to create a 'mega-refinery'. Yet there is no sign of any progress in this regard. In fact, in February 2025 reports arose suggesting that the state was realising it could not afford to rebuild the Sapref refinery nor expand its capacity to 600,000bbl on its own. Deputy director-general in the Mineral and Petroleum Resources department, Tseliso Maqubela, and Minister Gwede Mantashe told Parliament in February 2025 that they were looking to regional partners – including Angola's Sonangol or Botswana Oil – to help rebuild the refinery. The state thus now sits with a defunct and out-of-date refinery with enormous social and environmental liabilities. It may not have the capital to get it going again, and even if it does, many experts suggest it will be a stranded asset in the near future. Its former owners, Shell and BP, have disappeared into the sunset. All the while, the communities of South Durban continue to bear the disastrous health costs and environmental devastation caused by the refinery. DM Open Secrets is a nonprofit organisation which exposes and builds accountability for private-sector economic crimes through investigative research, advocacy and the law. To support our work including the investigations that go into the Unaccountable series visit Support Open Secrets
Daily Maverick
2 days ago
- Daily Maverick
CEF ignores red flags and gives Shell and BP a clean break on Sapref oil refinery deal
The Central Energy Fund's purchase of BP and Shell's oil refinery in South Durban will have far-reaching repercussions as the state assumes the burden of addressing its environmental violations and eventually decommissioning it. In May 2024, the state-owned Central Energy Fund (CEF) announced that it would purchase the South African Petroleum Refinery (Sapref) oil refinery in South Durban – and all its related assets – for just R1. CEF says the deal is crucial to South Africa's energy security and to 'address the challenges in South Africa's energy future'. The reality is more complicated. The purchase – which releases previous owners BP and Shell from any responsibility for the refinery's liabilities – will have far-reaching repercussions. The burden to restore the refinery, address its environmental violations and eventually decommission it, will all now fall to the state and the public. In late 2024, Open Secrets was provided with a detailed complaint from a whistle-blower through the Organisation Undoing Tax Abuse (Outa) regarding CEF's purchase of Sapref. The complaint included more than 1,000 pages of documents provided to CEF as part of the due diligence process prior to the purchase, as well as the details of the final sale agreement. These documents reveal serious red flags about the purchase that CEF seemingly ignored, and that helps explain why Shell and BP were happy to walk away from the refinery for just R1. This is part one of a two-part series that examines the purchase. This article examines the deal in detail, focusing on the warnings and red flags raised with the CEF between 2021 and 2024. The second part will focus on the advisors who worked on the deal, and the CEF board that approved it. Sapref's dirty history Sapref has a long history of poor governance and environmental harm. Established in South Durban in 1963, the refinery was jointly owned by multinational oil giants Shell and BP until the sale in 2024. Residents of South Durban, which includes Bluff, Merebank, Clairewood, Umlazi and Wentworth, have long been subjected to unsafe living conditions due to the pollution from Sapref. The refinery also accrued significant environmental liabilities that have gone unaddressed for decades. In 2015, the South Durban Community Environmental Alliance (SDCEA) and the Vaal Environmental Justice Alliance (Veja) initiated legal proceedings to get the eThekwini Municipality to disclose atmospheric emission licenses and compliance reports of the Sapref and Engen refineries. Settler's Primary School, which sits between the two refineries, reportedly had asthma rates that were among the highest in the world. Pollution-monitoring company Ecoserv found that sulphur dioxide pollution in Merebank had exceeded World Health Organisation guidelines 124 times between 1 November 2000 and 31 October 2002, in a year where there was an overall decrease in sulphur dioxide pollution in this area. The refinery has posed major health and environmental risks since its inception, including accidents and petrol spills, explosions and fires, and day-to-day poisoning of air, land, water and bodies. In 2018, the KwaZulu-Natal Environmental Outlook report declared Durban's south basin an environmental 'hotspot'. CEF pursues the acquisition Despite this track record, the CEF and the then Department of Mineral Resources and Energy (DMRE) first expressed interest in purchasing Sapref in 2021. It came at a time when South Africa's refining capacity was severely constrained following the closure of several refineries. As a result, the country was (and remains) largely reliant on importing fuel. The SDCEA strongly opposed the purchase, urging the government to consult with all stakeholders before the purchase went ahead. The CEF and the new South African National Petroleum Company (SANPC) have used the decline of refining capacity to motivate for the purchase. They argue that the rehabilitation of the refinery is the answer to national energy security and job creation. Since the purchase, they have indicated their aim to increase the refinery's capacity from 180,000 barrels per day to 600,000 barrels per day, to create a ' mega-refinery '. This is strongly opposed by the SDCEA, which argues that ramping up refining capacity would severely worsen the already hazardous air pollution in South Durban. However, the purchase also comes with immense risks. The documents provided to Open Secrets by Outa reveal that CEF obtained transaction advice and due diligence from several firms when considering the deal. This included a 'Financial Due Diligence' report submitted by Mazars, a 'Technical Due Diligence' report submitted by Certis Engineering, and a 'Commercial Due Diligence' report drafted by Kearney for Mazars and CEF. All were completed at the end of 2021. Legal firm Fasken also conducted a legal due diligence in January 2021. Taken together, the reports expressed significant doubt about the financial and strategic value of CEF purchasing Sapref, especially if the sellers were to walk away from the refinery without any responsibilities. Ultimately, that's exactly what BP and Shell did, leaving the mess for CEF to clean up. To tell the story of the transaction, it's helpful to follow in chronological order. First, we will discuss the red flags raised during the 2021 due diligence, and the decision in 2022 to proceed with the purchase anyway. Then, we show the impact of the catastrophic floods in KwaZulu-Natal in 2022 that put the whole deal on ice. Finally, we show CEF decided to push ahead anyway, and how the terms of the final sale agreement in 2024 let BP and Shell off the hook. Red flags everywhere you look The due diligence reports obtained by CEF in 2021 highlighted a host of serious concerns that can broadly be divided into decommissioning liabilities, maintenance costs, long-term profitability and possible civil liability. 1. Decommissioning liabilities – perhaps the most important factor in weighing up CEF's decision to purchase Sapref is the liabilities it is assuming to ultimately decommission the refinery and its associated pipelines and infrastructure at the end of the refinery's life. The National Environmental Management Act and its accompanying regulations require financial provision to be made for the costs associated with safely decommissioning and remediating any environmental impacts from, among other activities, oil refineries. However, the Mazars financial due diligence from 2021 noted that Sapref's owners had neither calculated nor made provision for end-of-life decommissioning, and that any new owner would probably be required to take on this significant cost. Both Mazars and Certis found that, at a minimum, a $374-million (R6-billion at the time) provision should be available to decommission the refinery and its 'related onshore operations'. The Certis report indicated that 'robust negotiations took place to make sure that Shell and BP contribute to the decommissioning provision as good corporate citizens. It was proposed that a different approach be adopted to allocate the decommissioning provision equally between the Buyer and Seller, thus making each responsible for $187m'. By the time of the final deal, Shell and BP made no such contribution. 2. Capital spending needed for new fuel requirements – The Mazars and Certis due diligence highlighted legislation passed in 2021 requiring the move to significantly lower sulphur diesel production and use in South Africa. While this was supposed to be in force from 2023, it is now anticipated to come into effect in 2027. The due diligence estimated that between $545 and $1-billion (R8.7-billion-R16 billion) in capital expenditure would be required to upgrade the refinery to meet these requirements and stated that 'exactly how this will be funded is not yet certain'. 3. Required maintenance spending – the due diligence noted that the refinery needed extensive maintenance. The Certis report noted that Sapref had planned an extensive maintenance and turnaround programme in 2022 and 2023 that would cost around R3-billion over two years. Mazars confirmed that there was extensive corrosion of the refinery tanks – creating serious risk of leaks – and that many machines in operation at the refinery were 'not environmentally compliant', increasing the risk of fines and plant shutdowns. The Mazars report also cautioned CEF that Sapref had been increasing maintenance for years but it had 'not resulted in improved revenues or margins'. 4. Profitability and industry outlook – up until the refinery's closure in 2022, Sapref had the capacity to refine 180,000 barrels (bbl) per day. However, the due diligence documents found that the minimum production capacity for a refinery to be profitable was 400,000bbl. Thus, it was anticipated that in addition to the required spending on maintenance and retooling the plant for cleaner fuel, it would need to expand its capacity significantly to be financially viable. But Mazars noted the uncertain future for the market for petroleum products in the medium to long term, given the country's climate commitments, the climate crisis and the proposed shift to electric vehicles and cleaner fuels. The documents concluded that the electrification of the transport sector is a 'major long-term threat to refining'. It added that a pathway to adequately address carbon emissions would significantly reduce demand for petroleum in the coming decades, leaving 'very few refineries profitable'. When it was reported in early 2022 that CEF was interested in purchasing Sapref, the South African National Energy Association (Sanea) warned against it. Sanea said that it would cost more taxpayer money than it was worth to keep it operating, and that there was a likelihood that after spending that money, CEF would be left with a stranded asset in the next 10-15 years. Sanea's CEO said: 'Government is fixated with the idea that security of supply is linked to processing crude oil. That may have been the case several decades ago, but not any more'. 5. Possible civil liability – in the legal due diligence prepared by law firm Fasken, it warned that the Sapref refinery regularly violated South Africa's air pollution limits and its own licence requirements, including regular flaring incidents and the release of SO2 (sulphur dioxide) at far above legal levels. The report also noted community complaints about the high levels of cancer in surrounding communities and the allegations that this was linked to the refinery's emissions. The report noted that the CEF might find itself subject to criminal prosecution in the future if the refinery continued to contravene emission requirements. Despite these concerns, then minister of mineral resources and energy, Gwede Mantashe, gave his approval for the deal in December 2021. At that point, the deal envisioned an 'upfront acquisition cost of $10 million' to be paid by the CEF in cash, and that the CEF would raise a further $602-million in debt for required maintenance and inventory related to the refinery. This was R160-million in cash and R9.6-billion in debt in December 2021. By March 2022, a sale and purchase agreement had been drafted and edited by the legal teams for all parties. Open Secrets sent questions to National Treasury, querying whether the CEF had provided it with all the required documentation for the acquisition under the PFMA and whether Treasury had provided the requisite oversight. Treasury's response illuminated key issues. First, it stated that sections 51(g), 66 and 70 of the PFMA, relating to the granting of a government guarantee, were not applicable as CEF was only purchasing the Sapref assets and not taking on additional liabilities, as originally planned. However, Open Secrets' reading of the contract is that CEF did in fact take on additional liabilities, meaning it had done so without the government guarantee. When we provided National Treasury with the draft sale and purchase agreement, it stated it had not seen the document and could not comment further. Secondly, National Treasury pointed out that the CEF did not share additional information that Treasury had requested prior to the conclusion of the deal – this was pertaining to financial due diligence, the plans to decommission Sapref, and other operational costs. Treasury also requested engagement between itself, CEF and the DMRE on the status of the deal, but this engagement has not happened either. Both the CEF and DMRE failed to respond to Open Secrets' questions sent to them. The 2022 floods April 2022 saw the most catastrophic flooding disaster recorded hit Durban: 459 people were killed and 88 were still missing by the end of May 2022; 4,000 homes were destroyed, 40,000 people were left homeless and 45,000 people were temporarily left unemployed. The flood engulfed the Sapref refinery, leaving it under three metres of water, washing hydrocarbons on to surrounding beaches and mangroves, and causing 'extensive damage to equipment and infrastructure, including plant, roads, IT systems, electricity and water systems'. Sapref became inoperable at this point, and in April 2023, Sapref announced that it was retrenching half of its workforce, given the extensive damage to the refinery, adding that the damage required 'intensive capital investment of about three-five years' duration'. According to the post-flood transaction advice document from Mazars to CEF, CEF visited Sapref in June 2022 to inspect the site and subsequently, all negotiations were paused. This arguably should have been the end of the deal, and the state should have required Shell and BP to fully clean up and decommission the site, bearing all the costs. Instead, Shell and BP 'returned to the negotiating table in November 2023', and things moved quickly from there. A new MOU was signed by January 2024, and CEF had completed the purchase by the middle of 2024. The final deal gives Shell and BP a 'clean break' The 2022 flood would have hugely escalated the risks and costs associated with purchasing the refinery. Given the risks identified in 2021, the flood would have increased the capital investment and maintenance requirements and increased local environmental damage and clean-up costs. It also meant that the R3-billion maintenance that Shell and BP had earmarked, could not take place. Despite this, CEF pushed ahead with the purchase. BP and Shell were only too happy to give away the asset at this point, 'selling' Sapref to CEF for a nominal R1. The only additional commitment from Shell and BP was to pay CEF R280-million to cover some operational expenditure in the first year after the sale, and R55-million towards employees. It is clear from the final draft of the sale and purchase agreement and CEF's internal correspondence provided to Open Secrets that the sale was based on a 'clean break principle', or voetstoots (at the buyer's risk). In CEF's board memorandum recommending the deal, it noted that, 'Due to the clean break sale principle, the asset is sold to CEF on as is basis. CEF has to absorb all related liabilities link (sic) with asset'. This was despite the 2021 due diligence which insisted that the CEF should only consider the deal if it could ensure a sizeable commitment from the sellers towards the massive future decommissioning costs. This suggests that Shell and BP were the main beneficiaries of Sapref's sale to CEF. They have walked away with indemnity from billions in liabilities – actual and contingent – associated with an out-of-date, environmentally non-compliant refinery that will cost billions to decommission. Those liabilities are now the responsibility of the state and the South African public. Shell and BP declined to comment on the estimated costs of decommissioning, citing confidentiality. The conclusion of the sale also occurred without public consultation with communities in South Durban who have been living with the environmental and health harms caused by the refinery for decades. The SDCEA told Open Secrets that they believe that this sale was a missed opportunity to move towards a 'cleaner, renewable energy future' centred around environmental protection, public health and sustainable development. The decision to push ahead with the deal raises important questions about who encouraged CEF to pursue the deal, and whether the board properly applied its mind to the totality of the evidence before it. As we discuss in the next instalment in this series, CEF received slightly different advice in 2023 – after the flood – that seemed to downplay the previous warnings. This more positive advice was also provided by Mazars, but this time in partnership with a team from CLG, formerly known as the Centurion Law Group. CLG is a prominent presence in South Africa's oil and gas space and is linked to prominent oil and gas lobbyists. Mazars and CLG were also linked to another dodgy deal at PetroSA, a few months prior to its involvement at CEF, that has since gone completely belly-up. Both Mazars and CLG failed to respond to detailed questions from Open Secrets. The next article focuses on the role that Mazars and CLG played in the acquisition of Sapref, why the advice given to CEF suddenly changed after the 2022 floods, and the conduct of CEF's board in approving the deal. DM Open Secrets is a nonprofit organisation which exposes and builds accountability for private-sector economic crimes through investigative research, advocacy and the law. To support our work including the investigations that go into the Unaccountable series visit Support Open Secrets.
