The controversial Mossgas/PetroSA saga reads like a psycho economic thriller . . . the one minute the loss-making, troubled state oil company admits failure and asks the central energy fund to place it under business rescue . . . then the board is fired to sign a dodgy $400 Million deal with a Russian exploration company to drill for gas off SA’s southern coast (AGAIN) – after it previously admitted a feasibility study found the location was technically and commercially problematic . . . ?
Russia’s Rosgeo in $400m deal to drill for SA gas
Agreement will help in building reserves.
Wendell Roelf, Reuters / 4 September 2017 15:35
Russian exploration company Rosgeo will drill for gas off the southern coast of South Africa under a $400 million deal with PetroSA to help build the African country’s reserves.
The agreement announced on Monday comes against a backdrop of declining domestic gas reserves that have curtailed output at PetroSA’s gas-to-liquid plant in Mossel Bay.
“The project envisages extraction of up to 4 million cubic metres of gas daily. This will subsequently be delivered to PetroSA’s gas-to-liquids refinery,” PetroSA said in a statement.
The deal was signed on the sidelines of the Brics block of developing nations meeting in Xiamen, China, and will see Rosgeo use seismic and drilling vessels to explore South Africa’s south coast, where Total also had acreage.
PetroSA running on fumes
Thursday 4 May 2017 – 6:11pm
File: PetroSA has asked the central energy fund to place it under business rescue. Photo: eNCA
JOHANNESBURG – PetroSA is in financial trouble. It has asked the central energy fund to place it under business rescue.The state-owned company has been running at a loss for the past three years.
It’s expecting another R2.2-billion loss for the year ended in March.
But despite the financial trouble, PetroSA paid out R17.3-million in performance bonuses to its executives.
It’s failed Ikhwezi project has also cost nearly R15-billion in the 2014-2015 financial period.
southcapenet | Sep 05, 2017 |
PetroSA signed a deal with Rosgeo on the sidelines of the Brics Summit in China for oil and gas development on SA’s coast.
State oil company PetroSA has signed an agreement with Russian geological exploration company Rosgeo, for about $400m to be invested in oil and gas development.
Business Day reported last week that former PetroSA board member William Steenkamp had accused Central Energy Fund (CEF) chairman Luvo Makasi in court papers of firing the board because it did not support a partnership with a Russian company linked to President Jacob Zuma.
Photos: William Steenkamp (left) and Owen Tobias
Steenkamp has lodged an urgent application to set aside his axing and that of Owen Tobias, another board member, and for them to be reinstated.
According to the founding affidavit filed by Steenkamp, the PetroSA board was fired because it had not signed due to its failure to sign off on the Rosgeo deal.
In June 2017, six board members resigned from PetroSA after Makasi had instructed its members to resign with immediate effect, or submit oral representations at the annual general meeting as to why they should stay.
PetroSA had eight board members and in May, Business Day was informed two had tendered their resignations. Steenkamp and Tobias were removed in July 2017 and an interim board appointed.
Interim board member Leanne Williams has since resigned, following allegations of corruption at PetroSA.
Rosgeo had provided a framework agreement on the Block 9 matter in April 2016, which was rejected at a board meeting in November 2016, as it was presented with binding terms whereas the process to award the farm-out for Block 9 had not been finalised.
Makasi, responding on Monday from China to questions about the matter, said the removal of the previous PetroSA board was not related to the Rosgeo matter, as he had stated in his responding affidavit.
“More so, the matter which is alleged to be the reason thereof [the board removal] had never been brought by the previous board to our attention as the CEF board and thus no reference is made to it in any correspondence between the CEF board and the previous PetroSA board, thus it could not have been the reason for the disagreement.”
The exploration agreement was signed on the sidelines of the ninth annual Brics summit in Xiamen, China, by Rosgeo CE Roman Panov, Makasi and interim PetroSA chairman Nhlanhla Gumede, in the presence of Energy Minister Mmamoloko Kubayi, PetroSA said on Monday. The agreement involved the development of exploration areas of Block 9 and 11a off the south coast of SA.
“Within the framework of the agreement, Rosgeo is supposed to conduct a considerable volume of geological exploration work. In particular, it is planned to carry out more than 4,000km² of 3D seismic operations and over 13,000km² of gravity-magnetic exploration works, as well as the drilling of exploratory wells,” PetroSA said.
It said the project envisaged extraction of up to 4-million cubic metres of gas daily. This would subsequently be delivered to PetroSA’s gas-to-liquids refinery in Mossel Bay.
“The upside for PetroSA is the possible expansion of our depleting gas resources. Discovery of hydrocarbons on our shores has the potential to bring significant revenues to the country and prove the country’s oil and gas prospectivity,” Makasi said.
PetroSA has suffered huge losses over the past three years and has a projected loss of R2.2bn for the year to March 2017. This follows its record R14.6bn net operating loss in the 2014-15 financial year.
Central Energy Fund appoints new interim board at PetroSA MONEY
Thursday 6 July 2017 – 5:07pm
File: The Central Energy Fund has appointed an interim board to run loss-making Petrosa. Photo: eNCA
JOHANNESBURG – The Central Energy Fund has removed the remaining two board members of PetroSA and appointed an interim board.Six board members resigned from the ailing parastatal in June after the fund’s chairman, Luvo Makasi, instructed its members to resign with immediate effect, or submit oral representations at the annual general meeting as to why they should stay.The Central Energy Fund is PetroSA’s holding company.In May, Business Day was informed that two members had tendered their resignations.READ: PetroSA running on fumes. The two remaining board members, Owen Tobias and William Steenkamp, were not included on the interim board.
PetroSA said on Wednesday the decision to replace the board was the culmination of engagements with all parties concerned. It also took cognisance of the financial stability and strategic direction of the entity.
The fund’s new board, which was appointed with effect from July 5, are Nhlanhla Gumede as chairman, Leanne Williams, Quentin Mathew, Noto Eister, Puleng Kwele, Boy Manqoba Ngubo, Nomvuselelo Songelwa, Sepheu Simon Masemola and Mthozami Xiphu.
The Central Energy Fund’s board said the new PetroSA team would bring the “relevant industry experience and strategic acumen”.
“Their combined experience will further support the strategy to deliver value to the entity’s stakeholders through good governance, operational excellence and continued growth,” it said in a statement.
PetroSA has suffered huge losses over the past three years and has a projected loss of R2.2bn for the financial year to March 2017.
This follows its record R14.6bn net operating loss in the 2014-15 financial year.
In June, the PetroSA board made a presentation to the Central Energy Fund in which it said there was no risk that the company was no longer a going concern. It had denied mismanaging the entity.
The board added in its presentation that it had taken several steps to ensure that lessons learnt from the failure of Project Ikhwezi were applied.
In the project gas wells were drilled offshore to provide feedstock for PetroSA’s Mossel Bay gas-to-liquid refinery‚ which had led to the huge losses after limited gas reserves were discovered. Some of the PetroSA board members had resigned before the presentation and some afterwards.
Business Day has reported that the board of the troubled oil company had requested the Central Energy Fund place it under business rescue, raising questions about its status as a going concern. However, this has been denied by PetroSA.
PetroSA rethinks Mossel bay gas terminal
COMPANIES / 26 AUGUST 2014, 4:51PM / SAPA
PetroSA oil rig.
Johannesburg – Plans to establish a floating liquefied natural gas (FLNG) import terminal in Mossel Bay will no longer be pursued, PetroSA said on Tuesday.
The decision was made by the Petroleum Oil and Gas Corporation of SA (PetroSA) and the country’s National Oil Company (NOC), it said in a statement.
The location was found to be technically and commercially problematic, according to a feasibility study.
The study found meteorological and oceanographic conditions in Mossel Bay were severe and increased the logistical and gas supply costs of the project.
PetroSA said it had been investigating the possibility of importing LNG to supplement dwindling gas reserves in Mossel Bay since 2008.
It proposed the importation of LNG into Mossel Bay through a terminal which would float on the ocean.
Natural gas, found underground, is liquefied through a cooling process which makes it easier to store and transport.
The gas is cooled to about -160 Celsius, which shrinks its volume up to 600 times.
The liquid is stored and transported by ship to various terminals where it is returned to a gas at a regasification facility and piped to consumers.
PetroSA Group chief executive Nosizwe Nokwe-Macamo said the company would explore other location options.
“The good thing about this exercise is that the results of these feasibility studies will be put to good use in other projects in the medium to long-term.”
She said PetroSA had studied the 13 operational FLNG terminals in countries, including Argentina, Brazil, and the United Kingdom.
“The main distinguishing factor between these FLNG terminals and the one that was proposed for Mossel Bay is the fact that all of them are located either in very well-protected ports, very near the shore, or are located on very calm rivers,” she said. – Sapa