JOHANNESBURG – Turning around South Africa’s State run oil firm, PetroSA has emerged as the first priority of Central Energy Fund (CEF), the company that runs PetroSA.
This emerged during a briefing of the Parliamentary portfolio committee on energy on Tuesday, where legislators were given an update of the company’s annual performance.
The oil dealer reported a net loss of R382,3 million for the 2017/18 financial year, which weighed down the group’s earnings, according to a report by chief financial officer Lufuno Makhuba.
He said although PetroSA remained in the red, it had improved from R1,4 billon net loss reported in the previous year.
PetroSA reported a net loss of R382,3 million for the 2017/18 financial year, which weighed down the group’s earnings, Makhuba said.
Although this was still a loss, it improved from the R1,4bn net loss reported in the previous year, Makhuba noted.
The higher oil prices helped improve earnings.
“When the oil price is higher, PetroSA is able to make more money. When the oil price is low, PetroSA can’t make enough money,” he told the committee.
The auditor general previously raised concerns about the ability of the national oil company to continue existing in the future.
CEF interim CEO Sakhiwo Makhanya shared with the committee plans to save PetroSA, in a seven-month period, through an “emergency plan”. The seven-month plan is a rapid process with targeted initiatives.
“PetroSA can survive beyond today,” he said.
“PetroSA’s sustainability, PetroSA’s emergency plan or PetroSA’s turnaround is not just a PetroSA conversation. It is a group conversation,” he said.
Some of the initiatives in place will involve PetroSA leveraging off the group’s infrastructure for a number of its business operations, Makhanya explained. There are options to share resources across the group, he added.
Matters to be dealt with include deploying an external refinery team within the “next couple of weeks” to optimise refinery operations. Other tasks include strengthening sales and business development and institute consequence management, he said.
‘We can’t do nothing’
“We can’t have poor business performance, quarter on quarter, and do nothing else. It is important to address it.
“The plan deals with how to hold people to account,” Makhanya said.
There are also plans to develop a partnership strategy, as the initiatives that must be executed cannot solely rely on PetroSA’s balance sheet. This involves finding potential partners with the right tools and assets to support some of the initiatives, Makhanya told the committee.
Another important factor to address is leadership stabilisation.
“Part of the seven-month plan is to bring about desired leadership stabilisation at key roles,” he said.
“Issues at PetroSA are not being taken lightly,” he assured the committee. “We must fix what is broken today, otherwise we will not have a PetroSA tomorrow.”