Cape Town (Platts)--25Jan2008

Oil companies in South Africa are yet to feel the pinch of a crippling
power shortage, which has sparked public outrage and is threatening growth and
investment in Africa's economic powerhouse.

South African Petroleum Industry Agency's spokesman, Connel Ngcukana, on
Friday said the outages have had no impact on the oil and refining sector.

Ngcukana also said SAPIA was working closely with the state-owned
electricity utility Eskom to mitigate the risks of the power crunch, which was
brought on by years of underinvestment in generators, despite rapid growth and
a sharp increase in demand for power.

Engen, which operates the Enref refinery in Durban, said the cuts have
not had any "material impact" on its operations but a spokeswoman said some of
its 1,250 service stations were being disrupted where Eskom has started "load
shedding" to help ease the burden on the country's electricity supply system.

Sasol, which operates the Natref refinery at Sasolburg with Total, also
said operations were unaffected.

Parts of the country have been intermittently plunged into darkness in
recent weeks as Eskom imposes planned blackouts to conserve dwindling
electricity supplies.

The beleaguered utility has embarked on a program to increase power
capacity that includes commissioning several new coal-fired and nuclear power
stations and recommissioning mothballed power stations.

But the crisis has tarnished South Africa's image as an investment hub
and increased scepticism in the country's leaders at a time of political
uncertainty.

Economists estimate the cost of the power cuts already runs to hundreds
of millions of rand (ie, tens of millions of dollars at Rand 1:$014), while
the outages have cast a shadow over South Africa's hosting of the 2010 Soccer
World Cup.

The country's gold mines, and mining companies were instructed on
Thursday night by Eskom to shut their mines, possibly for up to between two to
six weeks. Anglo Platinum, the world's largest platinum producer which
employs some 80,000 workers, has halted operations from today.

The government on Friday said the power outages are a national emergency
that must be treated with urgent action, which include a hike in electricity
prices, mandatory quotas as well as a penalty and incentive system.

At a press briefing this morning Minister of Public Enterprises, Alec
Erwin apologized for the "unprecedented and unplanned" outages, saying that,
when it came to making plans to expand supply to cope with increased
electricity demand, "government got it wrong."

But local reports said Erwin emphasized that the current emergency
situation would be dealt with in a manner that would not have an adverse
impact on investment flow and economic growth.

Eskom generates 95% of the country's electricity, as well as two-thirds
of the electricity for the African continent.

--Jacinta Moran, jacinta_moran@platts.com