The Central Energy Fund, which manages South Africa’s energy interests, wants the government to designate PetroSA SOC Ltd., whose executives are in talks over potential suspensions, as the national oil company.
The CEF asked for the “official designation” in a presentation to the parliamentary portfolio committee on energy Tuesday. It also wants Petroleum Agency South Africa, which acts as custodian of the national database on the commodity, to be appointed the exploration regulator and housed under the Department of Energy, it said.
The expanded role proposed for PetroSA comes as the board is in talks with its two top executives about placing them on leave as they probe the company’s poor performance. South Africa, which meets 70 percent of its energy needs through imports and the balance from processed coal and gas, is amending laws to prepare for investments in exploration, which the government and companies in August estimated will be in the range of $3 billion to $5 billion.
“An urgent turnaround plan needs to be developed and implemented” for PetroSA, the CEF said. “Time is of the essence.” Cash and feedstocks are depleting, and “economically viable options are limited,” it said.
PetroSA reported a loss of 1.65 billion rand ($134 million) for the 2014 fiscal year, citing higher project costs and delays in drilling for Project Ikhwezi, earmarked to supply the producer’s gas-to-liquids refinery in Mossel Bay. The company could make a further loss of as much as 14.9 billion rand for the year ended March 31, 2015, because of writedowns for the project, Business Day newspaper reported Wednesday, citing unidentified employees and members of parliament.
South Africa’s revised minerals law, which Mineral Resources Minister Ngoako Ramatlhodi in February said would be finalized by August, proposed giving the state a free 20 percent stake in all new oil and natural-gas projects and enabling it to buy an unspecified additional share at an “agreed price.”
The CEF asked that this stake go through PetroSA’s upstream, or exploration, unit.
PetroSA Chief Executive Officer Nosizwe Nokwe-Macamo and Chief Financial Officer Lindiwe Mthimunye-Bakoro haven’t vacated their offices, Zama Luthuli, a spokeswoman for PetroSA, said in an e-mailed response to questions Wednesday.
They are “still in their roles, no new announcements have been made by the board, pending the finalization of discussions,” she said. Maggie Modipa is standing in as CEO while Macamo is on sick leave, but “other than that, there are no changes that have been announced.” she said.