Minister of Energy Jeff Radebe and Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih announced on Friday that the Arab kingdom’s $10bn investment in South Africa would come in the form of a new crude oil refinery and petrochemical plant.

The two ministers held bilateral talks in Pretoria on Friday morning to discuss the details of the $10bn investment announced in July of 2018. They also discussed the possibility of Saudi Aramco using the tanks at Saldanha to store crude oil.

Supplying 40% of South Africa’s crude oil, according to the Department of Energy, Saudi Arabia’s significance as a trade partner cannot be overstated.

According to Trading Economics, Saudi Arabia accounts for 4.8% of South Africa’s total imports, also accounting for one of SA’s largest trade deficits.

A statement from the Department of Energy said the investment will see Saudi Aramco and South Africa’s Central Energy Fund working together to establish the terms of the investment and long-term partnership in energy.

“The two Ministers discussed the modalities for the proposed investment by Saudi Arabia in a new crude oil refinery and petrochemical plant in South Africa,” the statement said.

“Saudi Aramco and the CEF will jointly conduct studies that will inform the next milestones. In this regard the Ministers concluded and signed a Declaration of Intent to cooperate comprehensively in the field of oil and gas,” said the statement.

The statement said the use of Saldanha for storage and trading of crude oil by Saudi Aramco would improve security of crude oil supply for South Africa and offer a strategic location for Aramco in the trading of crude oil.

“The Ministers also discussed cooperation in Renewable Energy. Acwa Power, whose Chief Executive Officer was in the delegation, is a significant investor in the Renewable Energy Independent Power Producer Programme in South Africa,” the statement said.