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Energy committee tells PetroSA to put its house in order

Energy committee tells PetroSA to put its house in order [Image: www.telegraph.co.uk]

The Portfolio Committee on Energy held a meeting with the Department of Energy (DoE) and the Central Energy Fund (CEF) at the Head Offices of PetroSA in Parow.

The DoE and CEF briefed the Committee on their entities and subsidiaries respectively. The two spoke to the alignment of their key strategic priorities. The engagement between the department and CEF follows a strategic planning session that the Committee had earlier this year. Chairperson for the Committee, Fikile Majola, said the meeting was a continuation of strategic planning session that was held in Caledon.

In her opening remarks, the Deputy Minister of Energy, Ambassador Thembisile Majola, said the meeting came amid difficult times for the group. “There have been a lot of media reports about PetroSA. The meeting comes at an opportune time and gives us the opportunity to do what needs to be done and move forward. PetroSA is a key asset for the country,” said Ambassador Majola.

After the briefing by CEF, the Committee expressed concerns about the recent media reports about the executives that had been placed on suspension at PetroSA. The Committee questioned the current status relating to the suspension of PetroSA CEO, Nosizwe Nokwe-Macamo, and two other senior executives by the state-owned oil company Board.

“We as the Committee register our concern regarding the suspension of the three top executives. The oil company plays a pivotal role in the energy sector of the country and the supply of petrochemical products to South African oil companies,” said Majola. He added that the stability and governance of the oil company was critical considering the challenges the company was facing. 

The Committee said it needed to engage the Minister and Board to get a comprehensive briefing about the suspensions and the investigation that would be conducted into the executives that have been suspended. “As the oversight body, it is important to be briefed on the latest developments on what is happening at the state-owned oil company and not to be informed through media reports,” said Majola.

The Committee welcomed the turnaround strategy presented by CEF to improve the current governance and financial situation of PetroSA. The Committee was of the view that the PetroSA needed an overhaul as the current situation was not convincing. Therefore the immediate implementation of the turnaround strategy was critical.

The Committee expressed a concern about the equal powers that the board of PetroSA in comparison to CEF. The Committee was of the view that CEF as the holding company should have the upper hand when it came to PetroSA as its subsidiary. The Committee indicated that this needed to be corrected. 

Members of the Committee said PetroSA was on the verge of collapse and that it could not be correct that executives of the company were placed on suspension without the board taking responsibility. The Committee said the board needed to lead by example and resign. Furthermore, the Committee said the PetroSA board was not immune to the problems which beset the company.

Majola said based on the context as to what has happened and the presentation by CEF, it was important to wait for up to six months so that at the end of the period to determine if the business would survive.

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