Gauteng Business News

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LOGISTICS:  Fuel Giants Announce Depot JV


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The Competition Commission has approved a merger application filed jointly by Sasol Oil and BP Southern Africa (BPSA), in terms of which the approval of a proposed joint venture between the two companies was requested.

The unincorporated joint venture will comprise the co-ownership of two strategically-positioned depots, one being the Alrode Fuel Depot in Alberton, as well as the accompanying Beryllium site, both of which were previously owned exclusively by Sasol Oil; and the other being the Waltloo Depot in Pretoria, which was previously owned exclusively by BPSA.

Both depots will now be owned by the two companies in equal shares, which gives the companies equal access to the storage capacity of the depots. A joint venture agreement, read in conjunction with an operating agreement will govern the joint venture, generally, as well as the operations within the co-owned facilities.

“Meeting customers’ needs is a key priority for us; and we can now reach customers quicker and more efficiently in the northern areas. We’re pleased that BP Southern Africa saw the potential value in this partnership,” said Bernard Klingenberg, Sasol Group Executive, South African Energy.

Added Gerard Derbesy, BPSA’s CEO, “Ensuring security of supply in the areas that we operate in is of utmost importance to us and entering into a partnership such as this helps us to achieve this strategic intent.”

In addition to bringing both companies closer to their customers, the joint venture will ensure that distribution is safer and more efficient through shorter road deliveries to customers, optimised operations and improved road safety associated with shorter delivery routes.

It is anticipated that the joint venture agreement will come into effect in the second half of 2012, once all the suspensive conditions have been met. BP will draw from its previous experience as operator of the Waltloo Depot and will continue to operate this facility, only it will now do so on behalf of both parties. Sasol Oil will do the same in respect of the Alrode depot.

While a jointly-appointed Executive Committee will make the strategic decisions pertaining to the operation and maintenance of the joint venture, care has been taken to ensure that certain key matters will be referred to the executive management of each company.

Due to the fact that the joint venture amounts to no more than the co-ownership of depots, the two companies will otherwise continue to operate independently as competitors in the industry. Therefore, none of the personnel or operations of Sasol Oil or BP Southern Africa will be integrated as result of the new depot joint venture.

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