Cabinet has approved a plan to establish a single National Petroleum Company.
Cabinet has given its approval to start a process to establish a single National Petroleum Company.
The entity will be made up of the three current subsidiaries of the Central Energy Fund, namely PetroSA, the Strategic Fuel Fund and iGas, Cabinet said in a statement following a meeting on Wednesday in which it was briefed on the rationalisation of the companies.
“Cabinet approved the proposed appointment of a professional restructuring company that specialises in mergers to investigate the most viable model of this single National Petroleum Company,” the statement read. It did not give the name of the restructuring group.
PetroSA, in particular, has been facing financial difficulties, with the Auditor General in his 2017/18 report raising doubts that the entity would be able to continue operating in future. Earlier this year Pragasen Naidoo was appointed as group CEO. The Strategic Fuel Fund, meanwhile, is in a court battle to invalidate its controversial 2015 sale of SA’s strategic oil stocks.
- READ | Ramaphosa: I see a good future for SAA, Eskom beyond Covid-19
The combination of these state-owned companies into a single entity is in line with President Cyril Ramaphosa’s announcement during the state of the nation address in February that government would embark on a process to rationalise and repurpose state-owned enterprises, Cabinet notes.
In May the president told the South African National Editor’s Forum that Covid-19 would provide an opportunity for government to reform state-owned enterprises. Ramaphosa said that the names of those on the SOE Council, who will advise government on the way forward, would soon be announced.
