PetroSA reports R382.3 million net loss, will run out of gas reserves next year
CAPE TOWN – The cash-strapped Central Energy Fund (CEF) on Tuesday warned that its PetroSA plant would run out of gas reserves next year.
The organisation said in a presentation to Parliament’s Portfolio Committee on Mineral Resources and Energy that its biggest subsidiary, the oil and gas refining unit of PetroSA’s flagship Mossel Bay gas-to-liquid refinery, had gas reserves until next year.
It said PetroSA was losing market share and was in a precarious financial position.
Auditor-general Kimi Makwetu previously expressed concern about PetroSA’s ability to remain a going concern after it reported a net loss of R382.3 million for the 2017/18 financial year.
On Tuesday, the CEF failed to present its turnaround strategy to parliament again, six months after it was required to do so.
Problems at the CEF include large financial losses, in-fighting at board level, the “over-selling” of fuel stocks, long-time management vacancies and slow decision-making.
Deputy Mineral Resources and Energy Minister Thembisile Majola said in reply to questions on the lack of a turnaround strategy, that the portfolio committee had rejected an earlier strategy and the strategy was being revised to take into account some of the committee’s concerns.
Majola said the department would produce a turnaround strategy at the next portfolio committee meeting. In an operational update, CEF acting chief executive Kholly Zono said the fund was confident it could increase its market share of the petrol and diesel market from only 2 to 25 percent, once the new oil refinery came on stream and if the CEF could enter the downstream fuel retail market.
In addition, tanks at Milnerton and Island View in Durban were being refurbished, so that they could become “flexible points of supply in the gas economy”. He said feedstock for the new oil refinery could come from the new oil venture between South Africa and South Sudan, for which South Africa had pledged $1 billion (R14.75bn) over five years.
In addition, an LNG gas-to-power facility at Coega, outside Port Elizabeth, might also be extended to support PetroSA’s gas-to-liquids plant in Mossel Bay.