Online Reporter
The South African National Petroleum Company (SANPC) was launched last month with the bold aim of securing SA’s energy security.
It creates a new state-owned entity (SOE) by merging three Central Energy Fund (CEF) subsidiaries: PetroSA, iGas, and the Strategic Fuel Fund (SFF).
This is the product of the SANPC Bill, which creates a new government-owned entity to manage strategic oil reserves and storage.
Given the government’s abysmal track record in managing state-owned entities — which received more than R520 billion in taxpayer-funded bailouts over the last decade — there remains understandable concern that this new entity will feed from the same trough.
The Economic Freedom Fighters (EFF) doesn’t like it one bit, arguing that the reliance on outsourcing creates a platform for corruption, with private sector companies exploiting state assets.
This week government put flesh to the corporate skeleton and filled in some of the gaps in how exactly the SANPC would go about unlocking R95 billion in promised market opportunities and extracting R1,5 billion a year in “synergy optimisation”.
Rather than merging and amalgamating the three entities, the new company will operate on a lease and assignment model, which is a legal way of ring-fencing the troubled PetroSA’s legacy assets, such as its gas-to-liquids refinery in Mossel Bay, where reserves have run out, as well as decommissioning liabilities of about R1 billion.
Key leases and contracts have now been transferred to SANPC.
These include SFF fuel tank farms in Milnerton and Saldanha in the Cape, the Montague Gardens depot in Cape Town (owned jointly by SFF and BP), cash and various assets owned by the SFF and PetroSA in Ghana and Sudan.
The SANPC intends to rescue SA’s rapidly depleting fuel refining sector, with less than 35 percent of refined fuel now being locally produced, compared with 80 percent in 2010. — Moneyweb
