PetroSA hit by new R8.8bn funding blow
The cash-strapped state-owned enterprise appeals to Mineral Resources Minister Mosebenzi Zwane for a reprieve ahead of a funding gap crunch
FINANCIALLY squeezed PetroSA has to fill an R8.8bn funding gap before February 2017 unless it is given a reprieve by Mineral Resources Minister Mosebenzi Zwane.The gap relates to abandonment and rehabilitation — when a plant is shut down and the area environmentally rehabilitated.The National Environmental Management Act requires that provisions for abandonment, decommissioning and rehabilitation be fully funded upfront but PetroSA does not have the cash reserves for this.The state-owned enterprise (SOE) has only set aside R1.9bn of the estimated R10.7bn it will require when it stops operating, because it has run out of feedstock for its gas-to-liquid refinery in Mossel Bay. It would also have to decommission its offshore structures.Most of the abandonment expense is set to be incurred up to 2023 but the timing will depend on when PetroSA’s offshore gas fields stop producing at economically viable rates. This will depend on future oil and gas prices.PetroSA has applied to the minist...
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