PetroSA appoints legal consortium for Project Mthombo

Wednesday, April 15, 2009

Cape Town - PetroSA has appointed a consortium of local and international legal firms to advise them on Project Mthombo, a billion dollar crude oil refinery, to be built in Coega in Port Elizabeth.

"The consortium consists of three South African firms - Edward Nathan Sonnenbergs, Mkhabela Huntley Adekeye Inc and Qunta Inc - and two international partners, UK-based law firm Clifford Chance, and Nixon Peabody of the US," PetroSA said.

Together they have formed the ENS-led Consortium that would for the next few years perform a vast array of legal advisory tasks for PetroSA on the 400 000 barrels a day, US$9-11 billion crude oil refinery.

According to Head of PetroSA legal services Owen Tobias, the appointment of the consortium is recognition of their confidence in a South African-led consortium with significant BBBEE participation to provide world class legal advisory services.

"At PetroSA we are quite pleased about the prospect of working with such an accomplished, eclectic team of legal counsel.

"They are a formidable group with a proven track-record in complex projects both locally and internationally," said Mr Tobias.

PetroSA said it accepted the consortium's bid because of their unique proposal which is a combination of two emerging law firms as well as an established one and two foreign counsels.

"Through this appointment we have ensured that the goals of transformation and BBBEE in the legal fraternity are appropriately advanced," said Mr Tobias.

The consortium will provide advice on several aspects of the project including joint venture arrangements, project finance, regulatory approvals and environmental obligations.

ENS-led Consortium spokesperson Mzi Mgudlwa said he was pleased that the consortium had won the bid.

"What makes this achievement unique is the fact that local counsel has been appointed to lead the consortium ... this is ground breaking stuff for South Africa.

"Over the next three years we will work closely with PetroSA, to deliver world-class legal and tax solutions for this project by using our breadth and depth of expertise," said Mr Mgudlwa.

Project Mthombo is currently in the full feasibility phase, with the final investment decision on the project expected next year.

Over the last year the project had reached several significant milestones that include the appointment of HSBC (largest banking and financial services organisation) as financial advisers.

Leading global engineering, construction and services company KBR were appointed in December 2008 to carry out the feasibility studies as well as the front-end engineering design (FEED) for the mega refinery.

Project Mthombo's construction is expected to start in 2010, and it is expected to come on stream in 2014/15.