The South African National Petroleum Company (SANPC), a merger of three of the Central Energy Fund (CEF) subsidiaries- iGas, PetroSA and Strategic Fuel Fund, can prepare to operate as a subsidiary of the Central Energy Fund (CEF), according to the National Treasury’s approval in terms of the s51(g) (h) of the Public Finance Management Act of 1999.
This is after the company and its subsidiary, the Central Energy Fund (CEF), announced on Monday, that after a tense week, it has smoothed relations with both organized labour and non -unionized employees of merging entities (iGas, PetroSA and SFF), on issues related to its go-live on the 1st April 2025.
Jacky Mashapu Communications Executive at SANPC, said in a statement, this agreement is an interim measure, until the National Petroleum Bill is promulgated into law.
“However, for the SANPC to kickstart its operations, it would use the lease and assign model wherein certain assets of the merging entities will be leased to the new company.
The proposed Lease and Assignment model, provides the opportunity to strategically select what is leased and assigned to the SANPC by ring-fencing or isolating PetroSA’s legacy assets, such as decommissioning liability and current operating challenges of the Gas to Liquid Refinery.”
This move is expected to reduce financial risk for the SANPC.
Mashapu also said a total of 402 employees out of 1022 employees of the merging entities, would transfer during the first phase of the merger, which is effective immediately.
All other remaining employees (620 in total) associated with ringfenced assets & operations within Legacy entity (i.e. PetroSA), would transfer in the second phase of the project, once these assets have been turned around and optimized with the support of SANPC and CEF as the holding company.
“Meanwhile, work has begun to address the legacy assets which include the re-instatement of the Gas -To- Liquids (GTL) Refinery and the decommissioning liability methodology and provisioning as well as constraints associated with the non-profit status of SFF. Once all the matters relating to these legacy assets are resolved, they would be ready for transfer to the SANPC.”
Picture: Africa Sustainability Matters