Coal, Oil & Gas. Executive Summary. Sector. Trade. Investment

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1 Coal, Oil & Gas Executive Summary This sector fact sheet provides key trade and investment related statistics for the coal, oil and gas sector. Specifically, it shows global trade and investment flows including an analysis of top markets and products for South Africa and the Western Cape highlighting the largest and fastest growing products and sub-sectors. The key highlights in the coal, oil and gas sector are provided below: Sector Global production of oil is expected to increase from 83 million barrels per day (bpd) in 211 to million bpd in 22, while consumption is expected to increase from 85 million bpd in 211 to 99 million bpd in 22. South Africa s oil consumption will rise from an estimated 66 million bpd in 213 to 744 million bpd by 22, while refined production will increase from 465 million bpd to 731 million bpd by 22. South Africa has the second largest crude refining industry in Africa (after Egypt), with a capacity of 528,5 bpd in 213, in addition to a synthetic liquids production capacity from coal and gas of 25, bpd. South Africa is the undisputed global leader of gas-to-liquids (GTL) and coal-to-liquids (CTL) technology. The Western Cape is well placed to position itself as a major hub for the oil and gas industries along the western part of Africa. Trade Global trade of coal, oil and gas grew by 6.2 in 212 to reach ZAR1.2trn from 9.6trn in 211. South Africa s trade of coal, oil and gas increased from ZAR24bn in 23 to reach ZAR77bn in 213. India was the leading export market for coal, oil and gas from South Africa in 213, with a value of ZAR15bn. China and Mozambique rank second and third valued at ZAR9.6bn and ZAR7.1bn respectively. Western Cape exports of coal, oil and gas increased by 49 in 212 to reach ZAR9.3bn, up from ZAR6.3bn in 211. Imports were valued at ZAR111bn in 212, compared to ZAR83bn in 211, increasing by 34. Malaysia was the leading export market for coal, oil and gas products from the Western Cape in 212, with a value of ZAR882m. Singapore and Namibia ranked second and third valued at ZAR1.9bn and ZAR585m respectively. Investment Between January 23 and January 214, a total of 4,89 FDI projects were recorded, equating to a 2.5 share of global FDI, representing a total capital investment of ZAR14,695bn. Between January 23 and January 214, a total of 41 FDI projects were recorded into South Africa s coal, oil and gas sector, representing a total capital investment of ZAR99bn. The United Kingdom was South Africa s leading source market in terms of investment projects in the coal, oil and gas sector with 1 investment projects, accounting for 24. Between January 23 and January 214 a total of 6 FDI projects were recorded into the Western Cape coal, oil and gas sector, representing a total capital investment of ZAR14.9bn.

2 Value ('b/d) 1. Coal, Oil & Gas Sector Companies in the oil and gas extraction industry operate and/or develop oil and gas field properties. Such activities may include exploration for crude petroleum and natural gas; drilling, completing, and equipping wells; operating separators, emulsion breakers, desilting equipment, and field gathering lines for crude petroleum and natural gas; and all other activities in the preparation of oil and gas up to the point of shipment from the producing property. The petroleum refining industry comprises establishments primarily engaged in refining crude petroleum into refined petroleum. Petroleum refining involves one or more of the following activities: fractionation; straight distillation of crude oil; and cracking. The oil and gas sector includes the oil and gas extraction industry as well as petroleum refining. The upstream oil sector is a term commonly used to refer to the searching for and the recovery and production of crude oil and natural gas. The upstream oil sector is also known as the exploration and production (E&P) sector. The upstream sector includes the searching for potential underground or underwater oil and gas fields, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil and/or raw natural gas to the surface. The downstream oil sector is a term commonly used to refer to the selling and distribution of natural gas and products derived from crude oil. Such products include liquefied petroleum gas (LPG), gasoline or petrol, jet fuel, diesel oil, other fuel oils, asphalt and petroleum coke. The downstream sector includes petroleum product distribution, retail outlets and natural gas distribution companies. The downstream industry touches consumers through thousands of products such as gasoline or petrol, diesel, jet fuel, heating oil, asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides, pharmaceuticals, natural gas, and propane. 1.1 Global Coal, Oil & Gas Sector Overview The graph below shows that global production of oil is expected to increase from 83 million barrels per day (bpd) to million bpd in 22, while consumption is expected to increase from 85 million bpd in 211 to 99 million bpd in 22. Emerging markets, despite their recent volatility, are forecast to provide the majority of this growth, with non-oecd Asia accounting for roughly half of the gain. 2 GLOBAL OIL PRODUCTION & CONSUMPTION, F 15 3, 1 2,5 95 2, ,5 1, Growth 8,5 Source: BMI, f 215f 216f 217f 218f 219f 22f Production, b/d Consumption, b/d Production, change,67 2,48,81 2,27 2,63 2,1 1,73 1,78 1,58 1,26 Consumption, change 1,36 1,18 1,3 1,7 1,81 2,1 2,6 2,1 1,95 2,,

3 Growth The graph below illustrates global oil consumption from 211 to 22. According to Business Monitor International (BMI;214), consumption in the Middle East is expected to be the fastest growing region with a compound annual growth rate (CAGR) of 2.7 over the period 211 to 22, followed by Africa and Asia growing at CAGR of 2.7 and 2.6 respectively from 21 to 22. GLOBAL OIL CONSUMPTION GROWTH BY REGION, , 4, 3, 2, 1,, -1, -2, -3, f 215f 216f 217f 218f 219f 22f Africa 2,58 1,29-1,53 3,31 3,93 3,91 3,43 3,45 3,48 3,39 Middle East 4,31 4,23 3,4 3,52 3,57 3,76 3,47 3,36 3,3 3,14 Europe 3,5 1,99,64 1,57 2,43 2,67 2,74 2,66 2,69 2,71 Asia 3,45 3,69 1,82 2,9 2,27 2,5 2,54 2,63 2,36 2,4 Latin America 2,13 2,71 2,28 2,36 2,42 2,48 2,48 2,27 2,27 2,33 Global 1,36 1,18 1,3 1,7 1,81 2,1 2,6 2,1 1,95 2, North America -,6-2,18 1,36,95,72,71,73,55,58,61 Europe -2, -,77,7,55,45,46,42,43,44,42 3 Source: BMI, 214 Global Natural Gas Liquids (NGL) production is forecast to grow by net 3.3 million bpd from 28 to 215, with 2.9 million bpd of the growth coming from OPEC and.4 million bpd from non OPEC countries. Most of the NGL growth stems from OPEC countries, notably Qatar, Iran, Saudi Arabia the UAE and Nigeria. Outside of OPEC, Russia and Kazakhstan will also see strong growth. In 212, coal once again exhibited the largest demand growth of all fossil fuels, with an additional 134 million tonnes of coal-equivalent (Mtce) compared with 211. Global coal demand grew to million tonnes (Mt) in 212 representing 17 Mt (+2.3) more than the previous year, despite weak demand from the world s two largest consumers, China and the United States.

4 Value (' bpd) 1.2 South African Coal, Oil & Gas Sector South Africa's oil and gas sector is set for growth, as an upsurge in exploration and the increasing prospects of the country's offshore acreage point towards considerable upside potential for the country's long-term upstream prospects (BMI, 214). According to BMI 214, South Africa s oil consumption will register modest demand expansion and rise from an estimated 66 million bpd in 213 to 744 million bpd by 22, while refined production will increase from 465 million barrels per day to 731 million barrels per day by 22. South Africa has the second largest crude refining industry in Africa, with a capacity of 528,5 bpd, in addition to a total synfuel capacity from coal and gas of 25, bpd. In terms of both oil and natural gas, South Africa has modest resources that are overshadowed by most other countries on the continent. According to BMI (214) estimates, the South Africa had proven oil reserves of just 15 million barrels (bbl) in 213. By 213, oil consumption was expected to average 65,8 bpd met partly by synthetic oil production (derived mostly from coal), with 181, bpd of domestic crude and liquids production. SOUTH AFRICA'S OIL PRODUCTION & CONSUMPTION, f 215f 216f 217f 218f 219f 22f Refined products oil production, b/d Refined products oil consumption, b/d Refined products oil production, change y-oy Refined products oil consumption, change y-o-y Source: BMI, South Africa has four refineries, with over half its capacity concentrated in the port city of Durban. The country has the second largest crude refining industry in Africa (after Egypt), with a capacity of 528,5 bpd in 213, in addition to a synthetic liquids production capacity from coal and gas of 25, bpd. There are state-backed plans to build a 3, bpd refining complex, known as Project Mthombo. The facility would be located in the Coega Industrial Development Zone (IDZ) near Port Elizabeth on South Africa's south coast. The graph below shows South Africa s refined products production from 211 to 22 (forecast). South Africa s oil production is mostly concentrated in motor gasoline production and fuel oil production which are both expected to grow at a CAGR of 7 from 214 to 22.

5 Value (' bpd) SOUTH AFRICA REFINED PRODUCTS PRODUCTION BREAKDOWN, Source: BMI, f 215f 216f 217f 218f 219f 22f Motor gasoline production, b/d Distillate fuel oil production, b/d Residual fuel oil production, b/d Other products production, b/d Jet fuel production, b/d Kerosene production, b/d Refined LPG production, b/d South Africa has advanced oil and gas infrastructure. The main oil and gas infrastructure is shown below: FACILITIES Service Stations Oil Storage Facilities Oil Terminals/Ports Oil Pipelines Synthetic Fuels Plants LNG Terminals Gas Pipelines Source: BMI, 214 OVERVIEW OF SOUTH AFRICA OIL & GAS FACILITIES, 214 OVERVIEW South Africa has around 5, service stations. The largest distributor is Engen, with around 1,2 retail sites, followed by Caltex, Shell, BP, Total and Sasol. The Strategic Fuel Fund Association (SFF) manages South Africa's strategic inventory of crude oil on behalf of the state. The SFF holds strategic reserves of about 1.5mn bbl of crude at storage facilities in the Western Cap at Milnerton, outside Cape Town. According to the Petroleum Economist, South Africa has six oil terminals, at Saldanha Bay, Cape Town, Port Elizabeth, East London, Durban and Richards Bay. The Durban terminal is particularly important, as the city contains around 6 of the country's refining capacity, and is linked by pipeline to the Sasolburg refinery and Secunda synfuels plant. South Africa has no major oil export pipelines. It has two domestic pipeline networks of note that link its ports to major refining centres. The larger of the two networks runs from the port of Durban to the Richards Bay oil terminal, and to the major inland refining centres of Sasolburg and Secunda. The smaller of the country's two pipelines runs from the Saldanha Bay oil terminal to Cape Town. An additional subsea pipeline transports oil produced from oil fields south of Mossel Bay to the shore. South Africa is the undisputed global leader of gas-to-liquids (GTL) and coal-to-liquids (CTL) technology, following years spent developing alternative sources of crude oil due to an international embargo during the apartheid era. State-owned Sasol operates South Africa's only CTL plant, Secunda, while South Africa's other state-owned oil and gas conglomerate, PetroSA, operates the country's only GTL plant at Mossel Bay, known as Mossgas. South Africa has no LNG import terminals and we do not expect any to be built onshore in the near future. There is the possibility, however, of the country developing an offshore LNG floating, storage and regasification unit (FSRU). In April 213, PetroSA CEO Nosizwe Nokwe endorsed plans to develop a FSRU. In December 212, WorleyParsons was contracted to conduct a feasibility study for the construction of a floating LNG (FLNG) terminal at Mossel Bay. The Republic of Mozambique Pipeline Investment Company has built a ZAR1.1bn (US$149.1mn) gas compression station at Komatipoort in South Africa so that gas deliveries from Mozambique can be increased by 2. The gas compression station consists of two gas turbine-driven compressor units that raise gas flow rates at the 865km pipeline that pumps gas from the Pande and Temane gas fields in Mozambique to Sasol's synthetic oil production facilities at Sasolburg and Secunda. 5

6 Value (bcm) As shown below, South Africa s dry gas production is forecast to increase by CAGR of 16 over the period 211 to 22, while dry gas consumption is expected to increase by 3 over the same period. Source: BMI, 214 SOUTH AFRICA'S GAS PRODUCTION & CONSUMPTION, f 215f 216f 217f 218f 219f 22f Dry natural gas production, bcm 1,3 1,2 1,2 1,2 2,1 2,1 2,9 3,8 3,7 3,6 Dry natural gas consumption, bcm 4,6 4,5 4,4 4,5 4,5 4,6 4,7 4,8 5 5,1 Dry natural gas production, change y-o-y Dry natural gas consumption, change y-oy Growth REFINERIES IN SOUTH AFRICA, 214 REFINERY CAPACITY, B/D OWNER (CONTRACTOR) COMPLETION DATE Durban (SAPREF) 175, BP 5, Shell Durban (Engen) 135, Engen Cape Town 11, Caltex Sasolburg (Natref) 18,5 Sasol 64,Total TOTAL CAPACITY 528,5 PLANNED ADDITIONAL CAPACITY Project Mthombo 3, PetroSA & Sinopec 218 Richards Bay 3, Drako Oil & Energy Unknown No progress TOTAL NEW CAPACITY 6, Source: BMI, 214 The figure below shows the SWOT analysis of South Africa s coal, oil and gas industry: DETAILS Framework agreement signed, feasibility under way 6 STRENGTHS Leading country in the synthetic oil industry. Second largest and most competitive downstream sector in Africa. One of the most stable and low-risk investment environments in Africa. OPPORTUNITIES Considerable offshore exploration opportunities with major companies involved in upstream activity. Shale gas resources in the Karoo Basin are thought to be among the largest in the world. Coal-bed methane potential in the Karoo, with positive pilot production displaying upside potential. Source: BMI, 214 WEAKNESSES Limited proven hydrocarbon reserves. Inefficient downstream sector in need of considerable investment. THREATS Growing demand for refined fuels could lead to greater imports of petroleum productions and put pressure on balance of payments Increasing pressure on refining margins and more stringent fuels standards could lead some operators to exit South Africa's downstream market. Public opposition to hydraulic fracturing could hinder the development of shale gas despite growing support from the government.

7 1.3 Western Cape Coal, Oil & Gas Sector The Western Cape is well placed to position itself as a major hub for the oil and gas industries. New gas prospects on the west and south coasts are being explored and the region is marketing itself as a support and services hub to the oilfields of Nigeria and Angola. Significant amounts of oil are transported around the Cape of Good Hope every year: 32.2 of West Africa s and 23.7 of oil emanating from the Middle East. The ports of Saldanha and Cape Town are well equipped to deal with this traffic while the Port of Mossel Bay acts as a service hub for the regional gas industry. The Cape Town suburb of Milnerton is host to one of South Africa s four oil refineries, Chevron Refinery. The plant produces products such as jet fuel, bitumen, sulphur and paraffin and employs 33 people. PetroSA s gas-to-liquid (GTL) refinery in Mossel Bay is the country s leading gas facility. It has a capacity of 36, bpd, which is the equivalent of 45, barrels of crude oil per day. In terms of new gas fields, PetroSA has a 35 stake in prospecting rights in the Bredasdorp Basin off the South Coast which it is looking to farm out. Altogether the company is committed to spending ZAR5bn on finding new gas sources. Saldanha Bay is the site of the country s largest oil-storage facility. PetroSA maintain six tanks, each of which has a capacity of 1.19 million cubic metres. The total strategic reserve kept on-site is about 7.2 million cubic metres, or 45 million barrels. The Saldanha Bay Industrial Development Zone (IDZ) was officially launched at Saldanha Bay on South Africa's south-western coast on 31 October 213. Wesgro has acted in an administrative role on behalf of the three tiers of Government, in the delivery of the Saldanha Bay Industrial Development Zone designation. The Saldanha Bay Industrial Development Zone (SBIDZ) is intended to be an oil and gas and marine repair engineering and logistics services complex, serving the needs of the upstream exploration and production service companies operating in the oil and gas fields in Sub Saharan Africa. The SBIDZ will include logistics, repairs and maintenance, as well as fabrication activities. The IDZ designation will also afford the SBIDZ the ability to offer a contiguous customs-free area. The SBIDZ Li Co is the implementing vehicle of the SBIDZ and will be responsible for the provision of infrastructure, promotion, management and marketing of the IDZ. 7

8 Value (ZARbn) 2 Trade 2.1 Global Trade in Coal, Oil & Gas Sector Global exports of coal, oil and gas increased steadily from 23 to 28, before mildly decreasing in 29 due to the financial crisis. However strong increases in exports were recorded from 21 to 212. Global trade of coal, oil and gas grew by 18 in 212 to reach ZAR27trn, up from ZAR23trn in GLOBAL TRADE OF COAL, OIL & GAS, Trade (ZARbn) Source: TradeMap, 214 As can be seen below, Russia was the leading source market for coal, oil and gas in 212, valued at ZAR3trn, followed by Saudi Arabia and UAE valued at ZAR2.7trn and ZAR1.2trn respectively. Other top source markets were the United States (ZAR1.1trn), Nigeria (ZAR984bn) and Canada (ZAR948bn). TOP 1 EXPORTING MARKETS FOR COAL, OIL & GAS, 212 SOURCE MARKETS VALUE 212 (ZARbn) GROWTH SHARE Russian Federation Saudi Arabia United Arab Emirates United States Nigeria Canada Qatar Norway Kuwait Iraq TOTAL Source: TradeMap, 214

9 The United States was the leading global destination market for coal, oil and gas in 212, valued at ZAR3.5trn, followed by China and Japan valued at ZAR2.6trn and ZAR2.5trn respectively. Other top source markets were Republic of Korea (ZAR1.5trn), India (ZAR1.5trn) and Germany (ZAR1.4trn). TOP 1 IMPORTING MARKETS FOR COAL, OIL & GAS, 212 DESTINATION MARKETS VALUE 212 (ZARbn) GROWTH SHARE United States China Japan Korea, Republic of India Germany Singapore Netherlands France Italy TOTAL Source: TradeMap, 214 Crude petroleum oils was the largest globally exported coal, oil and gas product in 212, valued at ZAR14trn, followed by refined petroleum and petroleum gases valued at ZAR8trn and ZAR2.2trn respectively. TOP 1 GLOBALLY TRADED COAL, OIL & GAS, 212 PRODUCT VALUE 212 (ZARbn) GROWTH Crude petroleum oils Petroleum oils, not crude Petroleum gases Coal; briquettes, ovoids & similar solid fuels manufactured from coal Electrical energy Oils & other products of the distillation of high temp coal tar Petroleum coke, petroleum bitumen & other residues of petroleum oils Coke & semi-coke of coal, lignite, peat; retort carbon Petroleum jelly; mineral waxes & similar products Lignite w/n agglomerated, excl jet TOTAL TRADE Source: TradeMap, 213 9

10 Value 2.2 South Africa s Trade in Coal, Oil & Gas South Africa s exports of coal, oil and gas increased from ZAR24bn in 23 to reach ZAR77bn in 213. This is a clear indication of the high global demand for South Africa s coal, oil and gas products. South Africa s exports decreased by 1.3 in 213, while imports increased by 15 in 213. The trade balance has been negative over the ten year period as South Africa has remained a net importer. SOUTH AFRICA COAL, OIL & GAS SECTOR, Exports Imports Trade balance Source: TradeMap, India was the leading export market for coal, oil and gas from South Africa in 213, with a value of ZAR15bn. China and Mozambique rank second and third valued at ZAR9.6bn and ZAR7.1bn respectively. Other top export markets were the Netherlands (ZAR6.5bn), Taiwan (ZAR4.5bn) and Singapore (ZAR2.7bn). The fastest growing export markets were Netherlands (93), Mozambique (56) and UAE (16). Saudi Arabia was the leading import market for coal, oil and gas from South Africa in 213, valued at ZAR73bn, followed by Nigeria and Angola valued at ZAR35bn and ZAR19bn respectively. SOUTH AFRICA'S TOP 1 EXPORT MARKETS OF COAL, OIL & GAS, 213 VALUE MARKETS 213 GROWTH SOUTH AFRICA S TOP 1 IMPORT MARKETS OF COAL, OIL & GAS, 213 VALUE MARKETS 213 GROWTH India Saudi Arabia China Nigeria Mozambique Angola Netherlands India Taiwan Province of China Singapore Singapore Mozambique Israel United Arab Emirates Turkey Ghana Malaysia Netherlands United Arab Emirates Oman TOTAL EXPORTS TOTAL IMPORTS Source: Quantec, 214

11 Coal, briquettes, ovoids was the leading coal, oil and gas export product from South Africa in 213, valued at ZAR56bn, followed by refined oils petroleum, bituminous, distillates (ZAR14bn) and electrical energy (ZAR2.7bn). The fastest growing products were coal-tar distillation products including oils (75), electrical energy (37) and petroleum coke, bitumen and other oil industry residues (3). Crude petroleum oils, oils from bituminous minerals was the largest import product valued at ZAR142bn followed by oils petroleum, bituminous, distillates and petroleum gases and other gaseous hydrocarbons valued at ZAR62bn and ZAR3.1bn respectively. Coal-tar distillation products including oils and coal, briquettes, ovoids, made from coal were the fastest growing import product, growing by 757 and 138 in 213. SOUTH AFRICA'S TOP 1 PRODUCTS OF COAL, OIL & GAS, 213 SOUTH AFRICA S TOP 1 IMPORTS OF COAL, OIL & GAS, PRODUCT H271: Coal, briquettes, ovoids etc, made from coal H271: Oils petroleum, bituminous, distillates, except crude VALUE 213 GROWTH H2716: Electrical energy H2712: Petroleum jelly, petroleum wax, other mineral waxes H277: Coal-tar distillation products including oils H2713: Petroleum coke, bitumen & other oil industry residues H2711: Petroleum gases and other gaseous hydrocarbons H2714: Bitumen, asphalt, oil shales, tar sands, asphaltites H278: Pitch and pitch coke, from coal, mineral tars H2715: Bituminous mix, mastic from asphalt, bitumen/tar/pitch PRODUCT H279: Petroleum oils, oils from bituminous minerals, crude H271: Oils petroleum, bituminous, distillates, except crude H2711: Petroleum gases and other gaseous hydrocarbons H271: Coal, briquettes, ovoids etc, made from coal VALUE 213 GROWTH H2716: Electrical energy H2713: Petroleum coke, bitumen & other oil industry residues H277: Coal-tar distillation products including oils H274: Retort carbon, coke or semi-coke of coal, lignite,peat H2712: Petroleum jelly, petroleum wax, other mineral waxes H278: Pitch and pitch coke, from coal, mineral tars TOTAL EXPORTS TOTAL IMPORTS Source: Quantec, 214

12 Value 2.3 Western Cape The Western Cape s trade of coal, oil and gas recorded the largest value in 212 in terms of both exports and imports. Exports increased by 49 in 212 to reach ZAR9.3bn, up from ZAR6.3bn in 211. Imports were valued at ZAR111bn in 212, compared to ZAR83bn in 211, increasing by 34. The Western Cape maintained a negative trade balance over the period 23 to WESTERN CAPE TRADE OF COAL, OIL & GAS, Exports Imports Trade balance Source: TradeMap, 214 Malaysia was the leading export market for coal, oil and gas products from the Western Cape in 212, with a value of ZAR882m. Singapore and Namibia ranked second and third valued at ZAR1.9bn and ZAR585m respectively. 12 TOP 1 WESTERN CAPE S EXPORTS OF COAL, OIL & GAS, 212 PRODUCT (HS4) VALUE 212 GROWTH Malaysia Singapore Namibia Netherlands Mozambique Angola Mauritius Democratic Republic of the Congo Zimbabwe Zambia TOTAL EXPORTS Source: TradeMap, 213

13 Saudi Arabia was the leading import market for coal, oil and gas products to the Western Cape in 212, with a value of ZAR37bn. Nigeria and Angola ranked second and third valued at ZAR17bn and ZAR12bn respectively. TOP 1 WESTERN CAPE'S IMPORT MARKETS FOR COAL, OIL & GAS, 212 PRODUCT (HS4) VALUE 212 GROWTH Saudi Arabia Nigeria Angola Iran (Islamic Republic of) India United Arab Emirates Singapore Mozambique Netherlands Thailand TOTAL IMPORTS Source: TradeMap, 214 Refined oils petroleum, bituminous, distillates was the leading export product in this sector from the Western Cape, valued at ZAR8.8bn, followed by coal-tar distillation products including oils (ZAR173m) and bitumen, asphalt, oil shales, tar sands, asphaltites (ZAR124m). Bituminous mix, mastic from asphalt, bitumen/tar/pitch (419), Petroleum jelly, petroleum wax, other mineral waxes (361) and petroleum jelly, petroleum wax, other mineral waxes (346) showed strong growth in 212. The leading coal, oil and gas import product into the Western Cape was crude petroleum oils, oils from bituminous minerals valued at ZAR8bn, followed by refined petroleum oils, oils from bituminous minerals (ZAR3.5bn) and coal, briquettes, ovoids made from coal (ZAR128bn). Coal-tar distillation products including oils (83), peat (56) and crude petroleum oils, oils from bituminous minerals (37) were the fastest growing import products in WESTERN CAPE'S TOP 1 EXPORTS OF COAL, OIL & GAS, 212 WESTERN CAPE'S TOP 1 IMPORTS OF COAL, OIL & GAS, 212 PRODUCT H271: Oils petroleum, bituminous, distillates, except crude H277: Coal-tar distillation products including oils H2714: Bitumen, asphalt, oil shales, tar sands, asphaltites H2713: Petroleum coke, bitumen & other oil industry residues H2711: Petroleum gases and other gaseous hydrocarbons H2715: Bituminous mix, mastic from asphalt, bitumen/tar/pitch H2712: Petroleum jelly, petroleum wax, other mineral waxes H278: Pitch and pitch coke, from coal, mineral tars H271: Coal, briquettes, ovoids, made from coal H279: Petroleum oils, oils from bituminous minerals, crude VALUE 212 GROWTH PRODUCT H279: Petroleum oils, oils from bituminous minerals, crude H271: Oils petroleum, bituminous, distillates, except crude H271: Coal, briquettes, ovoids, made from coal H274: Retort carbon, coke or semicoke of coal, lignite, peat H277: Coal-tar distillation products including oils H2711: Petroleum gases and other gaseous hydrocarbons H2712: Petroleum jelly, petroleum wax, other mineral waxes VALUE 212 GROWTH H273: Peat (including peat litter) H275: Coal gas, water gas, etc. (not gaseous hydrocarbons) H2713: Petroleum coke, bitumen & other oil industry residues TOTAL EXPORTS TOTAL IMPORTS Source: TradeMap, 214

14 Value 3. FDI 3.1 Global FDI in Coal, Oil and Gas Sector Between January 23 and January 214, a total of 4,89 FDI projects were recorded into coal, oil and gas sector, equating to a 2.5 share of global FDI. These projects represent a total capital investment of ZAR14,695bn which is an average investment of ZAR3,594m per project. During the period, a total of 787,481 jobs were created. GLOBAL FDI OF COAL, OIL & GAS, 23-JAN Number of Projects Value Projects The classification of coal, oil and gas by subsectors is shown in the figures below. In terms of the classification of FDI projects, most projects were in the following sectors: Oil and gas extraction accounted for 29 share of projects Other petroleum and oil products accounted for 19 share of projects Natural liquefied and compressed gas accounted for 1 share of projects Support activities for mining and energy accounted for 9.1 share of projects In terms of the coal, oil and gas sector classification of FDI by Capex, most FDI went to the following sectors: Oil and gas extraction accounted for 32 of Capex Natural liquefied and compressed gas accounted for 15 share of Capex Other petroleum and oil products accounted for 14 share of Capex Fossil fuel electric power accounted for 13 share of Capex

15 Share GLOBAL FDI OF COAL, OIL & GAS BY SUBSECTOR, Oil & gas extraction Other petroleum & coal products Natural, liquefied and compress ed gas Support activities for mining & energy Other electric power generation (Coal, Oil and Natural Gas) Fossil fuel electric power Gasoline stations Petroleum refineries Coal mining Nuclear electric power generation Projects 29, 19,1 1,4 9,1 8,3 8,2 7,2 3,8 2,7 2,1 Capex 31,95 14,21 15,2 1,1 6,74 12,76,67 12,28 2,27 2,95 In terms of coal, oil and gas by business activity classification of FDI, most projects were in the following subsectors: Extraction accounted for 29 share of projects. Sales, marketing and support accounted for 19 share of projects. Manufacturing accounted for 15 share of projects. Electricity accounted for 13 share of projects. 15 In terms of coal, oil and gas by business activity classification of FDI, most Capex were in the following sub-sectors: Extraction accounted for 38 share of Capex. Manufacturing accounted for 36 share of Capex. Logistics, distribution and transportation accounted for 3 share of Capex. Sales, marketing and support accounted for.9 share of Capex.

16 GLOBAL FDI INTO THE COAL, OIL & GAS SECTOR BY BUSINESS ACTIVITY (PROJECTS), 23-JAN 214 GLOBAL FDI INTO THE COAL, OIL & GAS BY BUSINESS ACTIVITY (CAPEX), 23-JAN 214 Recycling,2 Maintenance & Servicing,2 Shared Services Centre,4 Recycling,2 Education & Training,5 Education & Training,3 Maintenance & Servicing,6 Shared Services Centre,4 Customer Contact Centre,8 ICT & Internet Infrastructure,4 Design, Development & Testing,9 Design, Development & Testing,7 Research & Development 1,1 Business Services,7 Headquarters 2,5 Headquarters,14 Business Services 4,4 Research & Development,19 Logistics, Distribution & Transportation 5,3 Retail,57 Retail 6,8 Sales, Marketing & Support,87 Electricity 13,1 Logistics, Distribution & Transportation 2,75 Manufacturing 14,5 Electricity 21,67 Sales, Marketing & Support 19,4 Manufacturing 35,8 Extraction 29,4 Extraction 37,69 16 The United States was the leading source market in terms of investment projects in the coal, oil and gas sector with 894 investment projects, accounting for 22. The United Kingdom and Russia ranked second and third with 38 projects and 281 projects respectively. SOURCE MARKETS FOR FDI IN COAL, OIL & GAS SECTOR, JAN 23-JAN 214 SOURCE MARKETS PROJECTS PROJECTS CAPEX CAPEX COMPANIES COMPANIES 1 United States United Kingdom Russia France Canada Netherlands Germany Japan Australia Spain TOTAL

17 The United States was also the leading destination market in terms of investment projects, for coal, oil and gas with 56 investment projects, accounting for 12. The United Kingdom and China rank second and third with 186 projects and 181 projects respectively. DESTINATION MARKETS FOR FDI IN COAL, OIL & GAS SECTOR, JAN 23-JAN 214 DESTINATION MARKETS PROJECTS PROJECTS CAPEX CAPEX COMPANIES COMPANIES 1 United States United Kingdom China Indonesia Russia Australia India Germany Canada Romania TOTAL Source: FDI Intelligence, 213 British Petroleum (BP) was the leading global company investing in the coal, oil and gas sector with 64 projects, followed by Shell and Total with 6 projects and 54 projects respectively. TOP 1 INVESTING COMPANIES IN COAL, OIL & GAS SECTOR, JAN 23-JAN 214 INVESTING COMPANY NUMBER OF PROJECTS CAPEX 1 British Petroleum (BP) Shell Total ExxonMobil Lukoil Gazprom Chevron Corporation Royal Dutch Shell Plc Repsol SA Petrobras TOTAL

18 Share Value 3.2 South African FDI in Coal, Oil & Gas Sector Inward FDI into South Africa Between January 23 and January 214, a total of 41 FDI projects were recorded into South Africa s coal, oil and gas sector, representing a total capital investment of ZAR99bn which is an average investment of ZAR2,417m per project. During the period, a total of 5,146 jobs were created. INWARD FDI INTO SOUTH AFRICA'S COAL, OIL & GAS SECTOR, 23-JAN Projects Value Projects The classification of coal, oil and gas by sub-sector is shown in the figures below. The following is seen: Coal mining accounted for 32 share of projects and 1 share of Capex. Other petroleum and coal products accounted for 2 share of projects and 24 Capex. Support activities for mining and energy accounted for 14 share of projects and.6 Capex. Oil and gas extraction accounted for 7 share of projects and 3 Capex. SOUTH AFRICA'S INWARD FDI INTO COAL, OIL & GAS SUBSECTOR, 23-JAN Coal mining Other petroleum & coal products Support activities for mining & energy Oil & gas extraction Fossil fuel electric power Other electric power generation (Coal, Oil and Natural Gas) Nuclear electric power generation Natural, liquefied and compresse d gas Petroleum refineries Projects 31,71 19,51 14,63 7,32 7,32 7,32 4,88 4,88 2,44 Capex 1,12 23,66,62 3,28 15,97 4,89,39 27,38 13,69

19 In terms of the coal, oil and gas sector classification of FDI by business activity, most FDI went to the following sectors: Extraction accounted for 41 share of projects and 21 Capex. Sales, marketing and support accounted for 17 share of projects and 1.4Capex. Electricity accounted for 12 share of projects and 21 Capex. Manufacturing accounted for 1 share of projects and 55 Capex. SOUTH AFRICA'S INWARD FDI INTO COAL, OIL & GAS BY BUSINESS ACITIVITY, 23-JAN 214 Headquarters Design, Development & Testing Customer Contact Centre Logistics, Distribution & Transportation,13 2,44,5 2,44,7 2,44 1,84 4,88 Business Services,11 7,32 Manufacturing 9,76 54,77 Electricity 12,2 2,67 Sales, Marketing & Support 1,35 17,7 Extraction 21,1 41,46 Capex Projects 19 The United Kingdom was South Africa s leading source market in terms of investment projects in the coal, oil and gas sector with 1 investment projects, accounting for 24. Australia and the United States rank second and third with 9 projects and 5 projects respectively. INWARD FDI INTO SOUTH AFRICA S COAL, OIL & GAS, 23-JAN 214 SOURCE MARKETS PROJECTS PROJECTS CAPEX CAPEX COMPANIES COMPANIES 1 United Kingdom Australia United States India Canada Norway Netherlands Germany Russia Japan TOTAL

20 Value The top 1 companies investing into South Africa s coal, oil and gas sector are provided below. TOP 1 INVESTING COMPANIES INTO SOUTH AFRICA S COAL, OIL & GAS, 23-JAN 214 INVESTING COMPANY NUMBER OF PROJECTS CAPEX 1 British Petroleum (BP) Coal of Africa (CoAL) Slater Coal Pioneer Natural Resources Homeland Energy Group AES Corporation (AES) BHP Billiton Anglo Coal C & C Technologies International Ferro Metals TOTAL Outward FDI from South Africa Between January 23 and January 214 a total of 28 FDI projects were recorded from South Africa s coal, oil and gas sector, representing a total capital investment of ZAR389bn which is an average investment of ZAR13,895m per project. During the period, a total of 11,69 jobs were created. SOUTH AFRICAN OUTWARD FDI INTO COAL, OIL & GAS SECTOR, 23-JAN Value Projects Projects The classification of coal, oil and gas by subsectors is shown in the figures below. In terms of coal, oil and gas sector classification of FDI, most FDI went into the following sectors: Other petroleum and coal products accounted for 36 share of projects and 6Capex. Oil and gas extraction accounted for 32 share of projects and 21 Capex. Natural liquefied and compressed gas accounted for 11 share of projects and 4 Capex. Coal mining accounted for 7 share of projects and 1.2 Capex.

21 Share SOUTH AFRICA OUTWARD FDI INTO THE GLOBAL COAL, OIL & GAS SUBSECTOR, 23-JAN Other petroleum & coal products Oil & gas extraction Natural, liquefied and compressed gas Coal mining Petroleum refineries Other electric power generation (Coal, Oil and Natural Gas) Gasoline stations Projects 39,29 32,14 1,71 7,14 3,57 3,57 3,57 Capex 6,74 21,71 3,55 1,15 12,75,5,5 The classification of coal, oil and gas by business activity is shown in the figures below. In terms of coal, oil and gas sector classification of FDI, most FDI went into the following sectors: Sales, marketing and support accounted for 39 share of projects and.44capex. Extraction accounted for 29 share of projects and 23 Capex. Manufacturing accounted for 29 share of projects and 75 Capex. Coal mining accounted for 7 share of projects and 1.2 Capex. 21 SOUTH AFRICAN OUTWARD FDI INTO THE GLOBAL COAL, OIL & GAS SECTOR BY BUSINESS ACTIVITY, 23-JAN 214 Electricity 1,85 3,57 Manufacturing 28,57 74,96 Extraction 22,75 28,57 Sales, Marketing & Support,44 39,29 Capex Projects Mozambique was the leading source market in terms of investment projects in the coal, oil and gas sector with 5 investment projects, accounting for 18. China and the United States ranked second with 4 projects each.

22 SOUTH AFRICA OUTWARD FDI INTO THE GLOBAL COAL, OIL & GAS, 23-JAN 214 SOURCE MARKETS PROJECTS PROJECTS CAPEX CAPEX COMPANIES COMPANIES 1 Mozambique China United States Qatar UAE Equatorial Guinea Egypt India Hong Kong Zimbabwe TOTAL The top 1 South African companies investing into the global coal, oil and gas sector are provided below: TOP 1 SOUTH AFRICA INVESTING COMPANIES IN METALS SECTOR, 23-JAN 214 INVESTING COMPANY NUMBER OF PROJECTS CAPEX 1 SASOL PetroSA Beacon Hill Resources Cockett Marine Oil LontohCoal Engen Nucoal SureGas New Alpha Refinery Ghana Eskom TOTAL

23 3.3 Western Cape s FDI Between January 23 and January 214, a total of 6 FDI projects were recorded into the Western Cape s coal, oil and gas sector, representing a total capital investment of ZAR14.9bn which is an average investment of ZAR2,491m per project. During the period, a total of 976 jobs were created. DATE INWARD FDI INTO THE WESTERN CAPE S COAL, OIL & GAS SECTOR, 23-JAN 214 INVESTING COMPANY Jan-9 Westinghouse Electric Japan SOURCE COUNTRY May-8 Royal Dutch Shell Plc Netherlands Dec-5 Pioneer Natural Resources Aug-4 C & C Technologies United States Jun-4 Statoil Detaljihandel Norway Jun-3 British Petroleum (BP) United Kingdom SUB-SECTOR Nuclear electric power generation Other petroleum & coal products INDUSTRY ACTIVITY Sales, Marketing & Support CAPEX JOBS Customer Contact Centre United States Oil & gas extraction Extraction Support activities for mining & energy Natural, liquefied and compressed gas Support activities for mining & energy Sales, Marketing & Support Manufacturing Headquarters TOTAL Between January 23 and January 214, a total of 5 FDI projects were recorded from the Western Cape into the global coal, oil and gas sector, representing a total capital investment of ZAR5.8bn which is an average investment of ZAR1,15.8m per project. During the period, a total of 463 jobs were created. DATE WESTERN CAPE S OUTWARD FDI INTO THE COAL, OIL & GAS SECTOR, 23-JAN 214 INVESTING COMPANY DESTINATION COUNTRY SUB-SECTOR INDUSTRY ACTIVITY CAPEX Sep-8 PetroSA Venezuela Oil & gas extraction Extraction Aug-8 PetroSA Egypt Oil & gas extraction Sales, Marketing & Support Jun-6 PetroSA Equatorial Guinea Oil & gas extraction Extraction Jun-6 PetroSA Equatorial Guinea Oil & gas extraction Sales, Marketing & Support Jan-4 Engen Uganda Gasoline stations Sales, Marketing & Support TOTAL JOBS 23 For more information on this publication and other Wesgro publications please contact research@wesgro.co.za. For more publications like this visit the Wesgro publications portal on our website at