Johannesburg - Strategic Fuel Fund (SFF) chairman Riaz Jawoodeen and chief executive Sibusiso Gamede have resigned in a huff following the SFF’s surprising and apparently unsanctioned bid for Chevron’s South African assets.
The Central Energy Fund (CEF), the government-owned entity that owns the SFF, on Friday announced Jawoodeen and Gamede’s resignations “with immediate effect”. The CEF’s announcement came a day after Department of Energy director-general Thabane Zulu came down hard on the SFF for making an offer for the Chevron assets without the knowledge and permission of the department and Energy Minister Tina Joemat-Pettersson. Zulu said the department – to which the CEF and ultimately the SFF, report – was disturbed at what he said was the SFF’s complete disregard for governance processes.
The CEF said its board met on Thursday evening “to consider reports that the SFF has expressed interest in acquiring Chevron SA assets.
Governance
The board established that these reports were correct and that the actions of SFF did not comply with governance requirements.
The CEF said its board had accepted the resignations and would urgently address “the gaps in governance compliance at the SFF and across the CEF group of companies”.
The CEF did not give details of what would happen to the SFF’s formal offer to Chevron. In a statement on Wednesday last week, Gamede confirmed that the SFF made a formal offer to Chevron and its financial advisers on June 24.
In its statement on Wednesday, the SFF said it made the offer as part of its mandate to ensure security of supply of liquid fuels and said it looked forward to a transparent and competitive sale process.
But the mooted transaction hit a brick wall less than 24 hours later when the department publicly reprimanded the SFF. The department on Thursday said it would launch a thorough investigation into the SFF’s offer to Chevron.
“The CEF board regrets the impact of this occurrence to Chevron, who are a valued industry partner. The group further regrets the perceived misalignment with the minister of energy and the Department of Energy,” CEF said. Gamede could not be reached for comment on Friday.
The US-based Chevron Global Energy Incorporated (CGEI), which is handling the sale of the assets, has declined to comment on offers for the South African business.
“We have communicated earlier that it will be a lengthy process. As a matter of policy, CGEI does not disclose details of commercial activities, and has no further comment to make at this time,” said Chevron.
Listed fuel producer Sasol, which already has a retail network in South Africa, on Thursday confirmed its interest in the Chevron assets. Oil group Puma Energy is another possible suitor for the assets. Puma, which describes itself as the fastest growing independent fuel distribution company in Africa, has expressed concrete plans to invest in the South African fuel retail sector.
The company started its operations in South Africa last year, with the acquisition of Brent Oil and Drakensberg Oil. The two acquisitions enabled Puma to expand its operations in South Africa. Puma already owns petrol station sites in certain parts of the country. Puma has expanded its footprint in several African countries mainly through the acquisition of major oil companies’ assets.
BUSINESS REPORT