The South African Department of Mineral Resources and Energy (DMRE) has announced the merger of subsidiaries of Central Energy Fund (CEF) iGas, PetroSA and the Strategic Fuel Fund (SFF).
The merger will be effective from April 1, 2021 and the new company will be called the South African National Petroleum Company.
The merger, motivated by the continued implementation of a new company with a streamlined operating model through the development of a shared services system and a common information platform, takes place in a few months after cabinet approval and confirmation that PetroSA had suffered losses of R20 billion. since 2014.
Other factors behind this decision included the determination to strengthen PetroSA, which had not had a permanent CEO for five years before the appointment of CEO Ishmael Poolo and which had become very ungrateful since his failure to secure gas for gases to liquids. refinery project in Mossel Bay.
Although the merger deadline has been set, the portfolio committee expressed reservations about the likelihood of the ministry meeting the deadline, given the existing legislative regime, of the outstanding issues raised in the forensic reports of SFF and PetroSA, as well as PetroSA’s current insolvency and liquidity challenges, official press release (https://bit.ly/2OBQeqH) on the briefing revealed.
“The South African energy sector is entering a new dawn,” said NJ Ayuk, Executive Chairman of the African Energy Chamber. “With the offshore gas discoveries and the announcement of REIPPP bid windows 5 and 6 on the horizon, now is the most opportune time to merge the CEF subsidiaries. Of course, this is not an easy task and delays can be anticipated, but this decision marks a real shift towards a meaningful strategy that will not only be beneficial for DMRE but also for potential investors and local development.
The African Energy Chamber welcomes this initiative and recognizes that it is a further step in supporting the country’s determination to restart the engines of sustainable growth and transformation of energy policy and infrastructure.