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Cape Town – Cash-strapped national oil and gas company PetroSA announced on Tuesday that it is offering its employees voluntary severance packages to reduce operating costs.
“We realised that we cannot achieve the desired cost-saving targets without having to look at our operational costs,” PetroSA’s acting group CEO, Mapula Modipa, said in a statement.
PetroSA’s decision to offer severance packages came amid plummeting oil prices and feedstock challenges for the company’s gas-to-liquids refinery in Mossel Bay.
“We will strive to ensure that the voluntary severance package we have put on the table for our employees to consider will help us to realise our goal without compromising the need to retain critical skills and maintain a sustainable business,” said Modipa.
According to Modipa, the move to reduce the headcount is strictly on a voluntary basis.
In mid-September, the Congress of the People (Cope) urged Energy Minister Tina Joemat-Pettersson to release a report on the R15bn loss incurred by PetroSA.
READ: Lift veil on R15bn PetroSA loss, urges Cope
The scale of the state-owned petroleum company’s loss was made public for the first time in court documents, which revealed what its loss would be after it finalised its accounts for the past financial year, Business Day reported on July 23.
The projected loss was linked to higher project costs, write-downs and delays in drilling for Project Ikhwezi, earmarked to supply the producer’s gas-to-liquids refinery in Mossel Bay.
In May, PetroSA suspended three top executives over declining revenues, poor investments and a failed bid to enter the fuel retail market.
CEO Nosizwe Nokwe-Macamo, finance chief Lindiwe Mthimunye-Bakoro and acting vice-president of upstream operations Andrew Dippenaar were placed on "gardening leave" pending an investigation.
PetroSA operates the world's third-largest gas-to-liquid refinery at Mossel Bay and sells petrochemical products to South Africa's major oil companies and also exports to international markets.
