New Board for South Africa's Troubled PetroSA

The board of South African state Central Energy Fund (CEF) announced July 6 the appointment of an interim board for PetroSA.

None of the previous PetroSA board members was retained, some having resigned while others were dismissed. Supervisory body CEF’s replacement of PetroSA's board had been expected, following scathing studies which exposed the way in which the loss-making state-owned E&P business was run.

PetroSA hit the record books when it notched up a rand 14.6bn ($1.1bn) loss for the financial year to March 2015, the largest annual loss ever for a South African state-owned business, and it is reported to be heading for a loss of over R2bn ($150mn) for the financial year to March 2017.

Its current financial crisis mainly stems from a drilling programme named Project Ikhwezi, which sought to replace dwindling gas production for PetroSA’s Mossel Bay gas-to-liquids (GTL) refinery.  A fraction of the hoped-for gas reserves were discovered, and the refinery is being converted to run on alternative feedstock.

Beyond South Africa, PetroSA has exploration blocks in Equatorial Guinea and Namibia, plus stakes of 3.82% in TEN and 2.73% in Jubilee, two Tullow-operated producing oil and gas fields offshore Ghana.

There have been reports in the local media that financial institutions which provided funding and guarantees to PetroSA have been working behind the scenes to ensure more stability.

The new PetroSA interim board is: Nhlanhla Gumede (chairman), Leanne Williams, Quentin Mathew Noto Eister, Puleng Kwele, Boy Manqoba Ngubo, Nomvuselelo Songelwa, and Sepheu Simon Masemola. All are little-known, and NGW has yet to be provided with more details by CEF. 

Gumede was on the PetroSA board from 2004 to 2006, but most recently has headed an agricultural development organisation. He has also worked as a civil servant in the Department of Energy including as adviser to the minister, and separately in Deloitte’s oil and gas division. 

John Fraser, Johannesburg