The CEF-Shell/BP SAPREF Deal: A Dirty Exit Wrapped in a Clean Break
The SAPREF refinery, once run by Shell and BP, is now sold to South Africa’s state-owned CEF. Critics question the deal’s transparency and its implications for the country’s energy future.
In what is now being labeled one of the most controversial state-backed acquisitions in South Africa’s energy history, the Central Energy Fund (CEF) has moved to acquire the SAPREF oil refinery from Shell and BP, two of the world’s largest fossil fuel giants. This transaction has been marketed by officials and corporate spokespeople as a “clean break” — a strategic move to secure the nation’s fuel supply and repurpose a dormant refinery. However, when unpacked, this deal reveals itself to be anything but clean. Rather, it is a murky arrangement that appears to absolve Shell and BP of decades of environmental degradation, possible regulatory non-compliance, and long-term liabilities, transferring the full weight of those burdens to the South African state and, by extension, its citizens. This is more than a business deal — it’s a social and ecological gamble with potentially devastating consequences for communities in south Durban and beyond.
➡️ Source: Daily Maverick – Shell and BP’s “clean break” from SAPREF
SAPREF’s Toxic Legacy: Pollution and Neglect in South Durban
For over half a century, the SAPREF refinery in Durban has loomed over the communities of Wentworth, Merebank, and the Bluff like a steel behemoth belching poison into the sky. Operated jointly by Shell and BP since its inception in 1963, the refinery produced 180,000 barrels per day at its peak, fueling both South Africa’s economy and a relentless environmental nightmare. Residents have long complained of sulfuric odors, thick plumes of black smoke, and mysterious health effects — chronic asthma in children, bronchitis, skin conditions, and even cancer clusters. Independent studies have repeatedly confirmed the correlation between proximity to the refinery and elevated rates of respiratory and cardiovascular illness.
One such study, conducted by researchers at the University of KwaZulu-Natal, found alarming levels of benzene and toluene — both carcinogens — in ambient air samples collected near SAPREF. This toxic exposure has been chronicled in countless complaints to the South African Human Rights Commission and environmental watchdogs, yet enforcement of environmental regulations was weak and inconsistent. In truth, SAPREF operated with near-impunity, buffered by its economic importance and the state’s reluctance to challenge multinational petroleum firms.
More troubling is that during the devastating floods that hit KwaZulu-Natal in April 2022, SAPREF was severely affected, and residents feared that floodwaters would mobilize decades of buried pollutants. The refinery’s shutdown in 2022 was framed as temporary, but in retrospect, it appears the oil majors were preparing their exit. Now, that exit is being facilitated by a state agency with minimal transparency and no public consultation.
➡️ Reuters – Durban floods and industrial pollution
A “Clean Break” for Corporations, A Dirty Burden for the State
The term “clean break” used in internal Shell and BP documents — and since echoed in public discourse — is dangerously misleading. What it effectively means is that these two fossil fuel giants are walking away from SAPREF without being held accountable for the site’s environmental rehabilitation, infrastructural decay, or long-term remediation. Shell and BP are reportedly being released from future legal and environmental liabilities, meaning the costs of soil decontamination, asbestos removal, underground tank maintenance, and structural repair will fall to CEF — a state-owned enterprise funded by South African taxpayers.
This could set a catastrophic precedent. According to the Public Finance Management Act (PFMA), no public institution may enter into a financially reckless or wasteful agreement. If it turns out that billions will be needed to clean up SAPREF — and environmental scientists believe that is likely — then this deal may itself be unlawful. Moreover, the National Environmental Management Act (NEMA) obliges polluters to rehabilitate the environment, yet the state now appears to be absorbing that responsibility on behalf of private corporations.
The fact that this acquisition has been pushed through with limited public scrutiny, no environmental impact assessment (EIA), and no published audit of SAPREF’s liabilities only deepens concerns. As GroundUp reports, there is no clear documentation indicating that Shell or BP conducted adequate environmental due diligence before vacating. The public has a right to know how this transaction was structured — and who will pay for the mess left behind.
Environmental Justice Betrayed: Communities Left Behind
Perhaps the most damning aspect of this deal is how it disregards the rights and well-being of those who have suffered most from SAPREF’s pollution. Communities in south Durban — overwhelmingly working-class and historically marginalized — have fought for years to have their grievances acknowledged. Organizations like the South Durban Community Environmental Alliance (SDCEA) have led grassroots campaigns to push for transparency, remediation, and meaningful environmental justice. Yet, they were not consulted or even informed about the terms of the SAPREF deal until after it was publicized.
This is a textbook violation of the principles enshrined in South Africa’s Constitution, specifically Section 24, which guarantees every person the right to an environment that is not harmful to their health or well-being. The Environmental Management Framework also requires consultation with affected parties for any major industrial acquisition or redevelopment — a step the CEF and the Department of Mineral Resources and Energy appear to have skipped.
Instead of being seen as key stakeholders, affected communities have been sidelined once again, as large entities negotiate behind closed doors. Not only does this reinforce historical patterns of environmental racism, but it also raises serious legal questions about whether this deal could be challenged in court.
➡️ Open Secrets report: Environmental accountability in South Africa
Nationalization of Risk, Privatization of Profit
The SAPREF deal represents a dangerous inversion of justice: Shell and BP extracted profits for decades — an estimated R1.5 billion annually at peak operation — while communities absorbed the health and environmental costs. Now, at the end of the refinery’s life, these multinationals are escaping cleanup costs, and the state is inheriting a toxic, flood-damaged, potentially dangerous industrial site.
This is the very definition of moral hazard. It tells every polluting corporation in the world that it is possible to do business in South Africa, degrade the environment, make money, and then hand the mess over to the government with impunity. Worse still, this deal may have broader implications for the global fossil fuel divestment movement. Shell and BP can now point to SAPREF and claim that they are offloading carbon-intensive assets as part of a green transition — when in reality, they are simply transferring the climate and pollution burden to the Global South.
What Should Be Done: Transparency, Accountability, and Environmental Reparations
What South Africa urgently needs is a full independent investigation into the SAPREF acquisition. Parliament should summon officials from the Central Energy Fund, the Department of Mineral Resources and Energy, and representatives from Shell and BP to testify publicly about how this deal was structured, whether due diligence was performed, and how environmental liabilities were assessed.
Secondly, civil society groups should explore legal avenues to force Shell and BP to contribute to a rehabilitation fund — potentially through a class action suit or constitutional litigation. International environmental law supports the principle that polluters must pay, and this case could be a landmark in applying that principle across borders.
Finally, any redevelopment of the SAPREF site should center community participation, environmental safety, and green industrial transformation. If South Africa is serious about a just energy transition, it cannot begin by letting corporations walk away from the mess they created.
A thorough investigative piece detailing due diligence failures, environmental liabilities, and implications of the “clean break”: Reutersfacebook.com+6dailymaverick.co.za+6dailymaverick.co.za+6
To know more: https://www.dailymaverick.co.za/article/2025-07-07-cef-ignores-red-flags-and-gives-shell-and-bp-a-clean-break-on-sapref-oil-refinery-deal/
The Strategic Importance of SAPREF in South Africa’s Energy Landscape
SAPREF, South Africa’s largest oil refinery, holds a pivotal role in the country’s energy sector. Located in Durban, it is jointly owned by Shell and BP, two global energy giants, and has the capacity to refine approximately 180,000 barrels of crude oil per day. This refinery not only supplies fuel to South Africa but also supports neighboring countries in the Southern African region. The strategic importance of SAPREF extends beyond mere fuel production; it is integral to the country’s industrial and economic stability. Any disruption or change in ownership of SAPREF can significantly impact fuel prices, availability, and energy security for millions of South Africans.
Moreover, SAPREF is a critical player in the nation’s efforts to transition towards more sustainable energy sources. While it currently focuses on refining petroleum products, the refinery is also involved in exploring cleaner technologies and efficiency improvements to reduce its environmental footprint. Given South Africa’s commitment to the Paris Agreement and other global environmental goals, SAPREF’s operations and future plans will be closely monitored by government bodies, environmental groups, and industry stakeholders.
The ongoing discussions about the potential sale or restructuring of SAPREF’s ownership have raised concerns regarding transparency, regulatory oversight, and the refinery’s future direction. Ensuring that SAPREF continues to operate efficiently and sustainably is vital for maintaining South Africa’s energy independence and economic growth in the coming decades.
Conclusion: A “Deal” that Should Outrage Every South African
This is not merely a deal about infrastructure or fuel. It is a betrayal of public trust, an abandonment of environmental responsibility, and an assault on the rights of vulnerable communities. If allowed to proceed without accountability, it may haunt South Africa for generations to come — not just in polluted soil and poisoned air, but in the dangerous message it sends about who pays the cost of corporate greed.
We must demand answers, demand justice, and above all, demand that Shell and BP pay to clean up what they have profited from. Anything less is environmental injustice disguised as statecraft.
Table of Contents
Conclusion: A Deal That Should Outrage Every South African
SAPREF’s Toxic Legacy: Pollution and Neglect in South Durban
A “Clean Break” for Corporations, A Dirty Burden for the State
Environmental Justice Betrayed: Communities Left Behind
Nationalization of Risk, Privatization of Profit
What Should Be Done: Transparency, Accountability, and Reparations
