MOSSEL BAY NEWS - The Portfolio Committee on Mineral Resources and Energy was on Tuesday, 10 September briefed by the Central Energy Fund (CEF) and its subsidiaries on their current state of affairs, in which the issue of the R14.5 billion loss by PetroSA due to unsuccessful gas exploration and the $1 billion gas exploration deal between SFF and the South Sudanese oil company, Nilepet, were put under the spotlight.
PetroSA expects its Mossel Bay gas-to-liquid (GTL) refinery to run out of supplies by the end of next year, it was indicated to Parliament on Tuesday.
Reserves to run dry by December 2020
The CEF told Parliament that reserves were nearly finished and were expected to run dry by December 2020.
There was no solution in sight for the GTL refinery, Parliament was told.
“PetroSA is close to negative cashflows, increasing its cost of doing business and unable to fund its long term plans,” the CEF stated.
The Mossel Bay Advertiser contacted PetroSA spokesperson Tumoetsile Mogamisi for comment and will publish the comment once it has been received.
Although acknowledging the huge financial risks associated with exploration activities, the committee raised a concern about the R14.5 billion spent by PetroSA which yielded only 20% of the envisaged outcome.
Money invested in exploration should be regulated
Thus, it held a strong view that the extent at which money was invested in exploration, should perhaps be regulated.
“There should be a mechanism to determine the extent at which investment can be put into exploration in order to mitigate the unfortunate circumstance of huge financial losses. The avenue of private-public partnerships could also be explored,” said Sahlulele Luzipo, chair of the committee.
On the $1 billion exploration deal with the South Sudanese oil company, the Portfolio Committee on Mineral Resources and Energy questioned the rationale behind the deal in light of the continued unstable political conditions in that country.
'Women are a necessity'
The committee further highlighted the issue of transformation at the CEF and its subsidiaries, encouraging that vacant senior positions be filled by women.
“Women are a necessity and equals and, they should be treated as such. Next time when entities appear before the committee we want to see women represented in the delegation,” said Luzipo.
The committee asked the Department of Mineral and Energy to provide information with regard to previous board members of the CEF and its subsidiaries dating back to 2010, including executive leadership at the department level.
On Tuesday, the CEF did not present its turnaround strategy to Parliament, as it was supposed to do.
As an explanation, Deputy Mineral Resources and Energy Minister Thembisile Majola said the portfolio committee had rejected the strategy previously presented and the strategy was currently being adjusted.
He added that the department would present a turnaround strategy at the next portfolio committee meeting.
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