PetroSA has high hopes with the Chinese

Sinopec agreement necessary

PetroSA logoDr Benny Mokaba, an independent consultant on energy planning and options working for PetroSA, confirmed to parliamentarians of the energy committee that a framework agreement had been signed between PetroSA and the giant Chinese petrochemical company, Sinopec. As a result, the Mthombo refinery project at Coega, “continues to gather momentum”.

He asked parliamentarians to remember “that this project had been named as one of the six major projects of the New Growth Plan”.

Crucial infrastructure problems affecting the project were described as rail, port and pipeline issues, relationships with the Coega Development Corporation, Eskom power and dealing with provincial and municipal matters. As this was a presidential “SIP” project, ongoing engagement and reporting on status was being given but parliamentarians were advised that “due to the competitive nature of the industry, very little more could be said.”

Refinery and gas projects

Dr Mokaba said that in the year under review PetroSA had continued to operate safely and profitably; that the Mossel Bay refinery “sustenance” had remained a key focus and the Ikhwezi offshore gas project is progressing well, drilling having started and first gas expected shortly.

However, he said that PetroSA faced increasing challenges with declining feedstock; increased competition for hydrocarbon assets; a weak rand and funding limitations; with the result that it’s cash “was depleting at a fast rate”.

African ventures

Most of the focus of the strategy was on the “upstream plan”, where Dr Mokaba said that PetroSA would “consolidate its recent acquisition in Ghana, known as ‘Sabre’; finalise “farming out” 55% of its equity stake in a block in Equatorial Guinea; and was looking at funding options for a possible acquisition in Venezuela. (During the presentation the exposure by the media of PetroSA of problems in dealings in Ghana had not been made, nor was it mentioned at this meeting)

Sinopec important to the venture

CoegaJoern Falbe, vice president, new ventures, PetroSA, said on midstream matters that the main issue was “we know what we don’t know” and this had led to better planning certainty and the realization that experts, especially when it came to the Mathombo project, were needed.

He pointed out that PetroSA were not the real experts in mega-projects such as this – in fact total project managers and logistical team expertise hardly existed in SA for this kind of undertaking to be handled “in house”, but Sinopec from China were, in their view, the answer and that is why the new framework agreement was an important stage to have finalised.

“We are working closely with IDC over the Mathombo project as well and through them we shall get the financing correct”, he said.   Members asked if government guarantees were going to be needed but this stage had not yet been reached, was the reply.

Little happening downstream

PetroSA said nothing on downstream issues other than to mention a petrol station was being built at Mbizana, working with the local community. Mbizana is a large municipal area located in the Eastern Cape Province on the R61 road connecting KwaZulu Natal south coastal boundary to the N2 highway with a population of approximately 246 500.

On downstream issues generally, the chair explained that PetroSA was in a competitive world and this would not be discussed
Associated articles archived
http://parlyreportsa.co.za//uncategorized/better-year-for-petrosa-with-offshore-gas-potential/
http://parlyreportsa.co.za//uncategorized/integrated-energy-plan-iep-is-not-crystal-ball-gazing-says-doe/

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