Johannesburg - The department of minerals and energy director-general Sandile Nogxina said yesterday that he doubted PetroSA, the state's oil and gas producer, would do business again with empowerment company Imvume Holdings after the furore created by the Oilgate saga.

"I would definitely be very much surprised if PetroSA does business with Imvume Holdings, I really would," Nogxina said.

Speaking at a hastily convened press briefing in Pretoria, Nogxina said that once Oilgate had been dealt with, the department would revisit its policies so that parastatals were not compromised in this way in future.

The Oilgate saga relates to alleged payments of R11 million made by Imvume, which had a contract to supply PetroSA with oil condensate for its refineries, to the ANC in the run-up to last year's elections.

PetroSA, in keeping with what it is allowed to do in terms of its empowerment procurement policy, advanced R15 million to Imvume to pay for the condensate in December 2003.

Imvume was to have paid this money to Glencore, the condensate supplier. Instead, the money was allegedly paid into the ruling party's bank accounts.

Nogxina said most parastatals found themselves in the difficult position of trying to comply with the prudence demanded by the Public Finance Management Act while trying to fulfil their obligations to promote and nurture black economic empowerment (BEE).

"They find that they must compromise one in order to promote the other," he said.

When Imvume had not paid Glencore, PetroSA paid Glencore directly for the condensate.

It had been a difficult decision and if the condensate had not arrived, PetroSA's refineries would have had to close, Nogxina said.

"So they decided to pay and to recover the money from Imvume later," Nogxina said, explaining that PetroSA had applied for the liquidation of Imvume to recover the money, but during the legal proceedings Imvume had indicated it would be prepared to repay the money.

"They have managed to pay R6 million back ," he said.

Yvonne Mfolo, a department spokesperson, said Imvume had initially been able to pay R1 million to PetroSA and undertook to pay R333 000 every month.

Nogxina did not regard PetroSA's actions as fraudulent since it was not its responsibility to police what Imvume had done with the money.

But if, after the public protector's investigation, it was found that "this didn't amount to an ordinary business transaction but a situation where public funds where used as party funds, well we don't condone that".

Nogxina said: "BEE companies are not simply entitled to get benefits. They also have a responsibility to society and such responsibility is to act in an ethical and moral way."