14 Oct 2014

President Lt Gen. Seretse Khama Ian Khama says the petroleum sector is a prerequisite for socio-economic and industrial development of any nation. 

Speaking at the launch of Botswana Oil Limited (BOL) on October 14, the President said petroleum products played a critical role in turning the wheels of industrial development and in turn improving the economic well-being of nations. 

Orapa and Letlhakane mines consumed about 1.3 million litres of diesel per month while the emergency power supplies in Orapa consumed an average of 22 000 litres of diesel per hour at full capacity and the President said this showed the importance of petroleum products in mineral production and power generation. 

“Without a continual and secure supply of petroleum products, our economy could be compromised,” he said.  Talking about BOL, he said it was important for Botswana, as a landlocked nation, to ensure a flawless flow of petroleum products in the country. 

“To this end, government saw it fit that rather than relying solely on multinational oil companies, we partake in the supply of these very critical products to assure security of supply,” he said.  President Khama said, however, that the good work these companies continued to play needed to be recognised. 

He said these multinational companies were driven by return on investments hence they made commercially based decisions such as what BP did in 2010 when it divested its operations in Botswana and Shell also sold significant portion of their investment. 

The President said there were also inherent issues that arose when it came to serving rural areas, where operations such as filling stations are deemed not commercially viable. 

“We also note that there is minimal participation of citizen owned companies in the petroleum sector,” he said.  President Khama said it was in this background that government decided to establish BOL to safe guard the security of supply of petroleum products. 

BOL would look at ways and means of bringing in petroleum products to ensure that Botswana has a reliable and sustainable petroleum industry. 

The company was formed in 2013 and serves as an agent in the transformation of the oil industry.  Its mandate would be to ensure security and efficiency of supply and primary distribution of petroleum products in the country. 

It was also mandated to manage state-owned strategic fuel reserve facilities, strategic stocks as well as bulk storage and distribution and also facilitate meaningful participation in the petroleum sector. 

Talking about citizen participation, President Khama said BOL should work with citizen emerging companies (CEC) to facilitate their participation in the oil industry as they had faced difficulties in the petroleum industry. 

“We see Botswana Oil Limited as a company that will provide support to the CECs, a catalyst that will provide opportunities for them so as to ensure that Botswana achieves security of fuel supply,” he said. 

The President said BOL was expected to develop world class products and services and thus supported the growth of CECs and their contribution towards economic development.  He called upon citizen companies involved in the oil sector to contact BOL and seek further information to explore areas of partnership. 

President Khama said the industry value chain presents vast opportunities for investment and business.  “These include among others, supply of products, transportation, storage facilities and upstream activities,” he said. 

In addition, the government had set aside funds to construct the biggest petroleum storage facility in the country at Tshele Hills, which would effectively double the current strategic stock holding. 

BOL, is a company wholly owned by government, was set up alongside Okavango Diamond Company ODC and Mineral Development Company Botswana Limited. ENDS