KPMG's economic impact analysis of S.A's petroleum industry

The South African Petroleum Industry Association recently commissioned a study conducted by global research firm KPMG to assess the economic impact of the petroleum industry on the country's economy. In a recent interview with CNBC Africa, Avhapfani Tshifularo, the Executive Director of SAPIA, shared some key findings from the study. Tshifularo highlighted the importance of conducting the research, citing a lack of understanding about the petroleum industry in South Africa among stakeholders, including employees in the sector. The study aimed to provide insights into how the industry contributes to the local economy and educate stakeholders about its significance. One of the key revelations from the KPMG study was that the petroleum industry contributes 8.5% to South Africa's GDP. This quantification of the industry's economic impact provides a tangible figure for its contribution to the economy. Additionally, the study identified over 700,000 direct and indirect jobs that are supported by the petroleum industry. Tshifularo emphasized the ripple effect of these jobs, explaining how various sectors benefit from the industry's activities. Moreover, Tshifularo discussed the level of foreign participation in South Africa's petroleum industry, noting the dominance of multinational companies such as BP, Chevron, Shell, Total, and Sasol. While foreign companies play a significant role in the industry, Tshifularo highlighted the industry's efforts in transformation, particularly in areas like management control and ownership. However, he acknowledged challenges in women representation and enterprise development. Regarding Chevron's plans to pull out of South Africa, Tshifularo revealed that information about potential buyers of Chevron's assets remains undisclosed. He discussed the challenges facing the industry, including environmental regulations, the need for refinery upgrades to meet cleaner fuel standards, and the impact of low oil prices on operations. Looking ahead, Tshifularo expressed hope for potential agreements within OPEC to cut output, which could potentially alleviate pressure from oil prices. Despite the challenges faced by the petroleum sector in South Africa, Tshifularo remains optimistic about the industry's resilience and ability to adapt to changing market dynamics. In conclusion, the KPMG study sheds light on the significant economic impact of South Africa's petroleum industry and underscores the importance of understanding its contribution to the country's economy.