MOSSEL BAY NEWS - There is material uncertainty over whether PetroSA, Necsa and Pelchem can continue to operate, the Auditor General said on Tuesday, 12 February.
The Auditor General (AG) this week briefed the Portfolio Committee on Energy on the Department of Energy and its entities' audit outcomes for 2017/18.
The report showed that three entities – the National Nuclear Regulator (NNR), The South African Nuclear Energy Corporation (Necsa) and its subsidiary Pelchem – had regressed in terms of their audit outcomes.
A key concern identified by the AG within PetroSA is debtor's collection periods, which have increased, putting a strain on cash flows. Another concern is the continued weak crude oil prices during the current year. Additionally, capital expenditure required to complete a statutory refinery shutdown will further deplete cash reserves, the AG said.
The Department of Energy received a qualified audit opinion, as the department did not include all irregular expenditure in the notes of the financial statements.
Committee chair Fikile Majola said the issues identified by the AG should be addressed before Parliament rises.
"What is evident is that the outcomes of the audit opinion reflect deeper problems in the operations of the entities and in their business models," Majola said.
The committee will meet with the department on 26 February.
Four years
These concerns come in the wake of excitement at the massive new gas find off the coast of Mossel Bay by French group Total. The find was described by Gareth van Zyl in biznews.com. as "enough to cover South Africa's imported fuel requirements for the next four years". The strike is 175km offshore in the Brulpadda Prospect, which is part of the Paddavissie Fairway – part of an 18 000 square kilometre block which Total has been prospecting for some years.
Mineral Resources Minister Gwede Mantashe said on Tuesday South Africa is positioning itself to get a slice of the global exploration budget. South-Africa was the second largest market for gas to liquid. It accounted for a share of 16.57% in the global market, in 2016.
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