DECLINING RESERVES
Unprofitable PetroSA’s future hangs in balance, says auditor-general
PetroSA posts a loss for the year to end-March of R1.4bn compared with the previous year’s total loss of R449m
The auditor-general has warned there is a "material uncertainty" over the ability of state-owned oil company PetroSA to continue operating as a going concern. The company, which makes up 75% of the revenue of its parent, the Central Energy Fund (CEF), posted a loss for the year to end-March of R1.4bn compared with the previous year’s total loss of R449m. PetroSA’s future is also threatened because of diminishing gas feedstock from its offshore wells, which feed its gas-to-liquid fuel plant in Mossel Bay, which is processing condensate as an alternative. Contrary to the utterances of the auditor-general, PetroSA directors say the group can continue operating as a going concern provided it can produce its annual targeted production volume of 7.2-million barrels and achieve a profit margin of 8%. Costs will have to be contained, including "a review of conditions of employment". However, in the PetroSA annual report tabled in Parliament on Friday the directors highlighted that a deterio...
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