Inept PetroSA team ‘caused record loss’
The state-owned oil company’s board is accused of mismanagement and incompetence in a confidential report to be tabled in Parliament
The R14.5bn loss for 2015 incurred by state-owned oil company PetroSA was due to management and board incompetence by rushing into a $261m project to drill for gas without proper preparation, a confidential report, soon to be tabled in Parliament, states. The loss is the biggest yet by a state-owned enterprise. The report is a summary of 11 investigations and consultants reports into Project Ikhwezi, a well-drilling project for liquefied natural gas, which was to be used as feedstock for PetroSA’s Mossel Bay refinery to prolong the plant’s life. However, drilling yielded only 10% of the gas that had been expected. While some of the investigations point to irregularities and a possibility of bribery and corruption in aspects of the project, the bigger problem appears to have been that investment decisions were made without the necessary technical information and that management instability had undermined the project. A report by consultancy IPA Advisory last February states that the ...
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