CAPE TOWN: State-owned oil company PetroSA is expected to announce a massive loss when it releases its financial statements at the end of July, due to the dismal failure of Project Ikhwezi, which aimed to extend the life of Mossgas, its gas-to-synthetic fuel refinery.
The disaster, for now, has put paid to PetroSA’s ambitions to become the repository of the 20% free carry on behalf of the government in all future oil and gas private investments. It also sheds light on the boardroom drama in which Energy Minister Tina Joemat-Pettersson and the PetroSA board asked three executives to take extended leave for poor performance. Two of the three — CEO Nosizwe Nokwe-Macamo and chief financial officer Lindiwe Mthimunye-Bakoro — have refused to vacate their offices.
Employees who spoke to Business Day said they were told two weeks ago by the board that the projected loss for the 2014-15 year was in the region of R14.9bn. This is due mostly to an operating loss of R2bn and impairment on Project Ikhwezi of R12bn. The impairment is a result of the new wells yielding only 10% of the gas deposits that had been expected when PetroSA invested in the project.
African National Congress (ANC) members of Parliament’s portfolio committee on energy said privately that they had been told to expect a loss of R9bn. A loss of between R9bn and R14.9bn would be the largest incurred by any state-owned company. It is also a very large reversal of fortunes. In 2009, the company had cash holdings of R11bn, but that had shrunk to R5bn by last year.
