iGas, PetroSA and Strategic Fuel Fund set to merge
The union will form a new entity and help recover losses suffered by PetroSA.
The South African Department of Mineral Resources and Energy (DMRE) has announced the merger of Central Energy Fund (CEF) subsidiaries iGas, PetroSA and the Strategic Fuel Fund (SFF).
This merger is effective from 1 April 2021 and the new entity will be called the South African National Petroleum Company.
Other factors that led to the merger include plans to establish a new business that has a streamlined operating model via the development of a shared services system and a common information platform. The merger is also in the backdrop of PetroSA incurring losses of R20 billion since 2014.
The move is also an attempt to fortify PetroSA which had not had a permanent CEO in five years prior to the appointment of CEO Ishmael Poolo. PetroSA had become unprofitable since its failure to secure gas for the gas-to-liquids refinery project in Mossel Bay.
The portfolio committee is, however, doubtful that the deadline for the merger will be met. The misgivings are fuelled by existing legislative regime, pending issues raised in the SFF and PetroSA forensic reports, together with insolvency and liquidity issues.
The African Energy Chamber has embraced the move and notes that this is yet another step to supporting the country’s determination to restart the engines of sustainable growth and the transformation of energy policy and infrastructure.