SA working on response to Iran crude oil sanctions

Friday, May 18, 2012

Pretoria - South Africa is working on "the most appropriate" response to the European Union (EU) and US crude oil sanctions on Iran, says the Department of Energy.

"We're looking at a range of options. Come end of May, Cabinet would have pronounced the most South African-appropriate response to the EU and US sanctions on Iran," Energy Minister Dipuo Peters said on Thursday.

Government is considering all options in terms of the potential impact of the sanctions. At the end of last year, US President Barack Obama signed a bill expanding US sanctions against Iran to cover its central bank and financial sector -- a move that allows penalties on foreign banks that settle oil imports with the Iranian central bank.

"Our concern as South Africa, in particular, is the impact of these sanctions on the total value chain. We are worried about the number of jobs that South Africans will lose," said the minister, adding that the sanctions would have a negative impact on a refinery making use of Iranian crude oil.

Government had set up a task team to look into the issue and has engaged with Iran, the US as well as countries that can offer alternatives.

"At present, we can't say that a waiver is the route we will ultimately be chasing. We're looking at a range of options," Peters told media ahead of the department's budget vote in Parliament.

Deputy Director General for Hydro-carbons and Energy Planning, Tseliso Maqube, said the matter had not been discussed in a "confrontational manner".

"This is not an easy matter to deal with. In all those engagements, there hasn't been any confrontational approach. We are having discussions and they are fairly cordial. We are putting our case and they are putting their case and were taking their case and preparing the necessary response," he explained.

Maqube expressed confidence in finding a solution that would work for South Africa and that the worst case scenario for the talks would be economic and not a security of supply issue.

"Our companies will be impacted economically because the issue is the cost of alternatives," he said.