Lift veil on R15bn PetroSA loss, urges Cope

Cape Town – The Congress of the People (Cope) on Tuesday urged Energy Minister Tina Joemat-Pettersson to release a report on the R15bn loss incurred by PetroSA.

“A loss of such magnitude will not only destroy the livelihoods of hundreds of employees but will become a further drain on hard-pressed South African taxpayers,” Cope spokesperson Dennis Bloem said in a statement.

The scale of the state-owned petroleum company’s loss was made public for the first time in court documents, which revealed what its loss would be after it finalised its accounts for the past financial year, Business Day reported on July 23.

The projected loss was linked to higher project costs, write-downs and delays in drilling for Project Ikhwezi, earmarked to supply the producer’s gas-to-liquids refinery in Mossel Bay.

"The details of the financial results are contained in an affidavit by company secretary Mokgaetši Sebothoma made in response to an application by chief financial officer Lindiwe Mthimunye-Bakoro to have her suspension, imposed last month, lifted," the Business Day reported.

According to Cope the PetroSA board had undertaken to investigate both the loss as well as the company’s poor performance by end of August 2015.

In May PetroSA suspended three top executives over declining revenues, poor investments and a failed bid to enter the fuel retail market.

CEO Nosizwe Nokwe-Macamo, finance chief Lindiwe Mthimunye-Bakoro and acting vice-president of upstream operations Andrew Dippenaar have been placed on "gardening leave" pending an investigation.

Bloem placed the embattled PetroSA in the same category as South African Airways and the South African Post Office which had “been losing billions over the past few years”.

“Inept management and grandiose plans have plunged these companies into enormous losses,” he said.

"Instead of being the engines that propel the economy forward, these state owned companies have become a huge drag on the economy."
PetroSA, which operates the world's third-largest gas-to-liquid refinery at Mossel Bay, sells petrochemical products to South Africa's major oil companies and also exports to international markets.