South Africa to Merge State Energy Firms

South Africa approved June 11 the merger of three oil and gas companies into a single entity as part of its plan to  rationalise state-owned enterprises.

The move will result in three companies PetroSA, the Strategic Fuel Fund (SFF) and iGas merged into one single National Petroleum Company. “This gives effect to the announcement made by president Cyril Ramaphosa in his state of the nation address on 13 February 2020, to repurpose and rationalise a number of state-owned enterprises to support growth and development,” the cabinet said.

PetroSA produces natural gas from offshore fields about 89 km from Mossel Bay, and makes synthetic fuels from this gas through a gas to liquids process. It also extracts crude oil from fields off the south coast of South Africa. The SFF acquires, maintains, monitors and manages the country’s strategic energy feedstocks while iGas is involved in gas marketing, trading and sales.

The cabinet also approved the proposed appointment of a professional restructuring company that will oversee the merger process. According to reports, South African state-run firms have become a major drain on public exchequer with almost all of them incurring heavy losses.