The Zambian government has decided to buy French oil major Total
SA's (TOT) 50% stake in the country's sole petroleum refinery due
to its strategic importance to the economy, the minister of energy
and water development has said.
In a statement seen by Dow Jones Newswires Tuesday, Kenneth
Konga said talks with Total are in advanced stages and are likely
to be concluded this week. The Zambian government already holds 50%
in Indeni Petroleum Refinery.
"The government...had considered all the options and decided
that it would be in the best interests of the country for
government to acquire Total's shares in the refinery," Konga
said.
Indeni is the leading supplier of fuel to Zambia's copper and
cobalt mines.
According to Konga, the government is now negotiating the sale
agreement with Total. Details of the transaction cannot be revealed
at this stage because talks are still underway, he said. Total
couldn't comment on the transaction.
Total acquired a 50% stake in the 20,000 barrels a day refinery
in 2001 from Agip SpA. Total assumed the supply of crude oil feed
stock to the refinery in 2002 following the liquidation of Zambia's
National Oil Co., but stopped in 2007 after disagreements with the
Zambian government.
The government has since been procuring feed stock for the
refinery but delayed deliveries have caused erratic fuel supply in
the country in the past couple of years, hurting copper mining
operations.
Copper mines consume more than 50% of imported fuel in
Zambia.
-By Nicholas Bariyo, Contributing to Dow Jones Newswires; +256
75 2624615; bariyonic@yahoo.co.uk