Botswana Oil paves way for citizens in oil industry
Zolani Kraai | Friday March 18, 2016 14:12
The Industry is currently dominated by five multinationals with limited participation by Batswana.
Presenting during a media roundtable held in Gaborone recently, BOL business development manager, Bruce Buno said the policy would guide BOL to create a platform that will empower local companies with keen interest to venture first into procurement and retail of petroleum products then look further at exploration and production of oil products.
“While we are yet to engage relevant stakeholders mainly government in finalisation of the policy, we anticipate a major breakthrough in the outcome of the entire framework,“ he said.
Buno also said, BOL, as managers of government owned petroleum facilities, would seek to strategically involve CECs in petroleum infrastructure, maintenance, construction, management and rental.
“The government supports the participation of local entrepreneurs and investors in the petroleum industry in order to enhance competition and promote Citizen Economic Empowerment (CEE).
Buno highlighted that CEC and the industry would achieve broader economic objectives such as the Economic Diversification Drive (EDD) initiatives. To meaningfully facilitate CECs, BOL and the Department of Environmental Affair (DoE) will look to ease some of the barriers that citizen-owned companies face in trying to penetrate the market.
Buno said that some of the barriers include capital intensity for infrastructure, competition and compliance, security of supplies and trade finances.
Buno further explained that BOL will not be a financier to CECs, neither will they act as their competitor nor regulator in the industry, as that is the responsibility of government.
“One of the BOL CEC policy objectives is to provide direction for the development of programmes that are aimed at raising skills capacity-building for CECs in order to attract increased investment in the industry,” he said.
Two years into trying to deliver its mandate of firstly securing oil supply for the country and then facilitate citizen participation in the industry, state owned Botswana Oil can say it has weaned off teething problems and has laid a platform for growth.
Starting off two years ago with a P10 million injection from its sole shareholder, government, including a seed loan of 20 million litres, Botswana Oil is laying the ground to venture into major projects.
Speaking at the event, Willie Mokgatlhe, Botswana Oil CEO said the fact that they managed to make a profit of P9.8 million in only their second year of operation in 2015 gives impetus to the deliverance of its mandate which is first to secure supply from the current 28 day cover to 60 day import cover.
“Our mandate is very clear. Before we actively facilitate for citizens to participate in the industry, first we have to secure oil supplies for the country.
We have seen multi-national coming and going in the past few years and we cannot continue to totally rely on private sector supplies for such as strategic product. Under this programme, we are building the 160 million-litre reserves at Tshele Hills.
We will also double our 30 million litres capacity at the Francistown storage depot while plans are also under way to set up a 20 million-litre deport in Ghanzi,” he said.
In a bid to reduce reliance on the South African route, Botswana Oil is also looking at leasing storage facilities in Mozambique and Namibia, which would come in hand when they are supply disruption in South Africa.
In the medium-term BOL is looking at Coal To Liquids projects, which can diversify the energy mix to shed reliance on imports. In the long-term the company will look at engaging in exploration activities.