Picture: SUNDAY TIMES
Picture: SUNDAY TIMES

The cabinet has approved the proposed appointment of a restructuring company to help merge three state-owned oil and gas subsidiaries into a single national petroleum company.

This would mean merging PetroSA, the Strategic Fuel Fund (SFF) and iGas, which all fall under the state energy company, the Central Energy Fund (CEF).

The cabinet held a meeting on Wednesday at which it was briefed on the work to rationalise all state-owned petroleum subsidiaries.

“This gives effect to the announcement made by President Cyril Ramaphosa in his state of the nation address on February 13 2020 to repurpose and rationalise a number of state-owned enterprises (SOEs) to support growth and development,” it said in a statement.

SA has more than 740 SOEs, which the government has been looking at either consolidating or rationalising. A number of the country’s SOEs are in a dire financial state, and were decimated during years of state capture.

The CEF and its subsidiaries have also experienced difficult times and instability in the leadership structures. Last month, it filled its vacant CEO position, along with those for its subsidiaries, marking the first time in six years that the state-owned company and its divisions had permanently appointed leaders.

This lack of leadership caused a number of strategic initiatives to be delayed, resulting in the CEF losing market share and experiencing revenue decline, it said.

The appointments come as the group, like all energy companies, faces turbulent times brought by the slump in fuel demand coupled with global oversupply.

The SFF has been the subject of controversy after 10-million barrels of reserves were irregularly sold off at below-market prices in 2015. The matter was the subject of a forensic investigation and, in April 2020, the SFF announced it would launch a court challenge to invalidate the sale.

quintalg@businesslive.co.za