PetroSA assets to be devalued by R1.1bn

THE state-owned oil company PetroSA is set to suffer a projected devaluation of assets of R1.1 billion this financial year, in addition to the R14.5b in impairment it suffered in the 2014/15 financial year. PetroSA yesterday gave Parliament’s portfolio committee on energy an insight into several investigations into the R14.5bn resulting from mostly the failed Project Ikwezi, which brought in much less gas than anticipated after the company spent billions on infrastructure. “There are indications that production assets were overstated by R1.1 bn for the year ending March 2017,” acting chief financial officer Webster Fanadzo said, adding that the latest impairment did not mean that PetroSA lost or damaged any assets. PetroSA said it had a cash balance of R2.5bn. Before Project Ikhwezi the balance stood at R12.8bn. “If we do nothing with the asset… the company will be going down,” said the company’s acting chief operating officer, Kholly Zono. The company also presented its turnaround strategy, but MPs, however, dismissed it as lacking practical ways on how it would be implemented and funded. In October last year, PetroSA announced it had parted ways with its former chief executive, Nosizwe Nokwe-Macamo, “on mutually acceptable and amicable terms”. – ANA