PetroSA CEO dismisses asset sell-off

Cape Town – Partnership options for national oil company PetroSA does not mean selling off state assets, acting group CEO Mapula Modipa said on Thursday.

“It rather means a cost-effective means of diversifying risks with identified partners and driving revenue and value creation for the company,” said Modipa.

Reacting to recent media reports that the company allegedly intends to sell off equity in some of its exploration blocks, she indicated that PetroSA is looking to leverage partnerships to ensure the supply of liquid fuels for South Africa.

READ: Cash-strapped PetroSA offers severance packages

Modipa made it clear that it is very important in PetroSA’s partnership strategy to sustain its gas-to-liquid (GTL) refinery in Mossel Bay as well as the company in general.  

PetroSA is, therefore, looking at a number of initiatives to streamline its operations and improve operations in order to be sustainable.

Due to the sharp fall in crude prices the company is experiencing “a highly constrained financial position”, explained Madipa.

Experts at this week’s Africa Oil Week Summit taking place in Cape Town, have indicated they expect the oil price to remain low for about another 12 to 18 months.

Delegates were also told that state owned oil companies in Africa had, therefore, better become competitive to survive the changed conditions in the industry on the continent created by the low oil price.

The lack of feedstock for the Mossel Bay GTL refinery is another contributing factor to PetroSA’s current state of financial affairs.

“PetroSA is constantly exploring various partnership options to unlock value for its assets across the value chain,” said Modipa.

“This becomes ever more important in the current depressed economic environment wherein oil and gas companies globally are facing tough operating conditions.”

She emphasised that as an organ of the State, PetroSA remains committed to protecting and advancing South Africa’s interests in the oil and gas sector.

ALSO READ: PetroSA looks for equity partners in offshore blocks