Judgment reserved in strategic oil deal case

As judgment was reserved in the Western Cape High Court on Thursday in the dispute between the government’s Strategic Fuel Fund (SFF) and oil traders over the sale of SA's strategic fuel reserves in 2015, global commodities giant Glencore announced it had reached an out-of-court settlement in which the company will be refunded and the state will regain ownership of the oil, notes Legalbrief. The SFF, a subsidiary of the Central Energy Fund, reached an ‘in-principle agreement’ in which Glencore, which is headed by SA-born Ivan Glasenberg, recognised that a deal to acquire 3m barrels of SA’s strategic oil reserves was invalid, says Business Day. The agreement relates to a controversial deal in which the SFF irregularly sold 10m barrels of SA’s strategic crude oil reserves in late 2015 for just under R5bn to eight companies, including multi-national oil trader Vitol. The SFF has asked the court to make a declaratory order to set aside the sale of the strategic fuel reserves, which would allow it to refund the buyers and keep the oil in SA. At the time of the sale, then acting CEO at the SFF, Sibusiso Gamede, claimed the disposal was part of stock rotation. Evidence last week indicated that Gamede accepted alleged bribes ahead of the stock sales. These payments are subject to an ongoing criminal investigation into the sales. Advocate Wim Trengove, on behalf of Vitol, said while the trader accepted that the sale and a related storage agreement were unlawful, the SFF as an institution was the culprit in this regard. Kameshni Pillay, representing Outa as a friend of the court, said there had clearly been impropriety on the part of the traders, too. She asked the judge to highlight their ‘egregious conduct' in his findings.