South Africa: PetroSA Must Begin Exploiting Venezuelan Oil Reserves

Venezuelan President Hugo Chavez says the Petroleum, Oil and Gas Corporation of South Africa (PetroSA) should begin exploiting his country's oil reserves, which are the largest in the world. PetroSA, which operates and manages South Africa's commercial assets in the petroleum industry and actively pursues exploration opportunities, he said should begin this as soon as possible. This comes after South African President Thabo Mbeki and President Chavez signed agreements aimed at strengthening partnerships in oil and energy, during the latter's first state visit to South Africa. "PetroSA should immediately go to Venezuela to start working with us to exploit the resources in the Orinoco Heavy Oil Belt that has the largest oil reserves in the world," he said on Tuesday following discussions with Mr Mbeki at the Union Buildings. He said the two countries had started to devise a strategic agenda, a framework of cooperation in energy and oil cooperation agreements. "All these arrangements should be implemented as soon as possible," he said. The agreement would bring growth and further stability to the South African oil market and help reduce the cost of electricity to South Africans, as the agreements were aimed at cutting out the middle man in oil trade between the two countries. Mr Mbeki said the aim of the agreement was to remove an element of cost and price but structures were yet to be developed. "The objective would indeed be to assist the process of reducing energy with a positive impact on the country and the lives of the people," he said. President Chavez said Venezuela was interested in using South Africa's oil storage capacity of some 45 million barrels and helping expand its refining capacity. "It will be a wonderful day when the first Venezuelan tanker stops by to leave oil for South Africa and to use the huge storage capacity that you have - 45 million barrels of storage capacity and to expand the refining capacity of 500 000 barrels a day, which is a good capacity. "This could and should expand if we use state of the art technology." South Africa is the region's largest oil consumer - making up more than 68 percent of the Southern African Development Community's total consumption - and the second-largest oil consumer in Africa after Egypt. PetroSA currently operates one of the world's largest gas-to-liquids (GTL) refineries at Mossel Bay on the southern coast of South Africa, and is actively pursuing oil exploration in Equatorial Guinea, Gabon and Egypt. Last month, PetroSA said oil from Venezuela could be earmarked for PetroSA's new $7 billion Coega refinery project, which would produce 250 000 barrels per day. In July, Minerals and Energy Minister Buyelwa Sonjica visited Venezuela and the Department of Foreign Affairs said the visit had paved the way for closer cooperation between the two countries. Venezuela, a member of oil cartel Organisation of Petroleum Exporting Countries (OPEC) has one of the world's largest oil reserves.