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2nd UPDATE: South Africa's Sasol May Diversify From Iranian Oil

Wednesday, Jan 25, 2012

--Sasol Ltd. begins to find alternatives to Iranian oil imports

--South Africa considering its stance towards Iran sanctions

--South Africa rethink comes as some Asian countries boost Iranian oil imports

--EU official hopes China and India won't boost Iranian imports

   By Devon Maylie 
   Of DOW JONES NEWSWIRES 
 

JOHANNESBURG (Dow Jones)--South Africa's Sasol Ltd. (SSL) is starting to diversify oil sources away from Iranian imports, it said Wednesday, as pressure from the U.S. and European Union mounts.

South Africa, which relies on Iranian crude for roughly 25% of its oil imports, is currently debating how to approach increased sanctions being imposed on Iran by the U.S. and EU that aim at choking off a key source of revenue from the regime. This week, the EU enacted new sanctions on Iran, including a planned oil ban effective July 1. New banking restrictions by the U.S. and EU also pose challenges to oil transactions with Iran.

"In view of recent developments regarding trade restrictions and possible oil sanctions against Iran, Sasol Oil is diversifying its crude oil sourcing," a company spokeswoman told Dow Jones Newswires, declining to give further details.

Sasol's move - and a simultaneous rethink of Iranian oil imports by the South African government - comes amid intensifying pressure by the U.S. and EU to isolate Iran through an oil embargo and other means. Despite those efforts, Iranian oil has continued to find willing buyers for its crude, especially among Asian countries.

Sasol, the world's largest producer of motor fuels from coal, relies on Iranian oil imports for about 20% of its crude requirement, or 12,000 barrels a day, at its Natref refinery. South Africa as a whole imported 98,000 barrels a day in the first half of 2011, according to the U.S. Energy Information Administration.

The U.S. Deputy Secretary of Energy Daniel Poneman this month met with South Africa's energy minister to talk about oil sanctions and U.S. representatives have been meeting with South African companies to explain the impact new sanctions will have.

"South Africa has not made a decision," a spokesman for the Department of International Relations told Dow Jones Newswires, in regards to the country's position on sanctions against Iran. "The matter is currently under discussion."

The EU this week enacted sweeping new sanctions designed to counter Iran's nuclear program. However, some policy analysts have questioned the effectiveness of the embargo given that other leading countries continue to import large quantities of Iranian oil. That group includes China, India, Japan, South Korea and Turkey.

Indian Oil Minister Jaipal Reddy said this week India would respect United Nations sanctions, but not sanctions by regional blocks or individual countries.

New data Wednesday showed that South Korea imported 238,860 barrels of Iranian crude a day last year compared with 198,918 barrels a day in 2010, according to data from Korea National Oil Corp.

China's 2011 crude-oil imports from Iran also rose last year, by 30% to 27.76 million metric tons, or 557,000 barrels a day, China's General Administration of Customs reported Saturday.

The EU has held "preliminary" talks with Japan and South Korea about the Asian nations replicating the import ban, an EU official told a press briefing Tuesday. Were they to do so, close to 50% of Iran's export market could be off limits. The official said in these talks, it was clear that the EU would need to act first.

The official also said the EU hopes that, at the very least, India and China--which have been critical of the sanctions--play a "neutral" role and don't increase their purchases of Iranian oil.

-By Devon Maylie, Dow Jones Newswires; +27117837848; devon.maylie@dowjones.com

(Min-Jeong Lee in Seoul and Laurence Norman in Brussels contributed to this story.)

(END) Dow Jones Newswires

25-01-12 1315GMT