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Cabinet Approves Advice To Enter Investment Partnership With US-Sanctioned GazpromBank


Minister in the Presidency Khumbudzo Ntshavheni announced that the government endorsed state-owned oil company PetroSA's advice to select the African subsidiary of the US-sanctioned Russian GazpromBank as the investment partner for the ZAR3.7bn refurbishment of a gas-to-liquid refinery in Mossel Bay.

  • The decision comes as no surprise after last month the Daily Maverick reported that "twenty companies submitted bids, but the unusually strict technical criteria meant that 19 of the 20 were eliminated, leaving Gazprombank’s local subsidiary, GPB Africa & Middle East, as the only qualifying bid."
  • The media outlet further reported that "the PetroSA bid evaluation committee and board raised concerns about partnering with Gazprombank, which is under US sanctions, and advised PetroSA to enter into negotiations with other bidders," but the company ignored lawyers' suggestion to restart the tender.
  • A statement from the Cabinet noted that "this selection of GazpromBank is still dependent on the Final Investment Decision that will be informed by a joint bankable business case, as well as all the terms and conditions which are anticipated to be finalised in April 2024".
  • While the potential for striking a deal with GazpromBank was already flagged last month, it draws renewed attention to South Africa's tensions with the US, which raised questions over bilateral trade relations earlier this year. The rand is the worst performer in the EMEA FX space today.

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