Cape Town – State-owned oil company PetroSA is set to suffer a projected devaluation of assets of R1.1 billion this financial year, in addition to the R14.5 billion in impairment it suffered in the 2014/15 financial year.
PetroSA on Tuesday gave Parliament’s portfolio committee on energy an insight into several investigations into the R14.5 billion resulting from mostly the failed Project Ikwezi, which brought in much less gas than anticipated after the company spent billions on infrastructure.
“There are indications that production assets were overstated by R1.1bn for the year ending March 2017,” acting CFO Webster Fanadzo said, adding that the latest impairment did not mean that PetroSA lost or damaged any assets.
PetroSA said it had a cash balance of R2.5 billion.
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Before Project Ikhwezi the balance stood at R12.8 billion.
“If we do nothing with the asset the company will be going down,” said the company’s acting chief operating officer, Kholly Zono.
The company also presented its turnaround strategy, but MPs, however, dismissed it as lacking practical ways on how it would be implemented and funded.
In October last year, PetroSA announced it had parted ways with its former chief executive, Nosizwe Nokwe-Macamo, “on mutually acceptable and amicable terms”.