PetroSA tables record losses of R14.5bn

PETROSA tabled its annual financial statements to parliament this week‚ confirming speculation of a record loss of R14.5-billion for 2015.

It stated that “radical actions” would be required to ensure its survival. The size of the loss‚ the biggest by a stateowned company‚ has been the focus of tense discussions within the government for months.

The business of PetroSA includes the exploration and production of oil and natural gas‚ and the production of synthetic fuels from offshore gas in Mossel Bay.

Its sole revenue stream has been the Mossgas refinery.

An attempt to extend Mossgas’s lifespan by drilling new wells has been blamed for the bulk of the losses.

The exercise resulted in a R12.2-billion impairment‚ says the report. It had been hoped Project Ikhwezi‚ as it was known‚ would tap into large new reserves‚ but it yielded 10% of the expected gas.

The second source of impairments were losses of R2.2-billion on PetroSA’s investment in Ghana’s Jubilee oil field.

The company says its offshore oil investments are to be reconsidered and the exploration operation in Equatorial Guinea scaled down. In the report‚ the auditor-general flagged PetroSA’s Equatorial Guinea subsidiary’s ability to continue as a going concern.

Energy Minister Tina JoematPettersson suspended group chief executive Nosizwe NokweMacamo and chief financial officer Lindiwe Mthimunye-Bakoro in June in anticipation of the losses and instituted an inquiry into their conduct. — BDLive