By Lehlohonolo Lehana.
The Department of Mineral and Petroleum Resources (DMPR) Gwede Mantashe officially launched the South African National Petroleum company (SANPC) in Johannesburg.
The new state-owned entity formed through the integration of iGas, PetroSA, and the Strategic Fuel Fund.
The creation of SANPC is a strategic move to enhance South Africa’s energy security, reduce dependence on imported petroleum products, and ensure more effective management of the country’s petroleum assets.
South Africa imports approximately 80% of its crude oil and refined products, costing over R300 billion annually and exposing the economy to global supply chain risks. The closure of major refineries, such as SAPREF in Durban and Engen’s facility, has left the country with limited refining capacity, with PetroSA’s Mossel Bay gas-to-liquids plant facing operational challenges. The SANPC’s core mission is to revive these assets and boost local production through strategic partnerships.
Mantashe emphasised the need for good governance and leadership at the SOE.
“To enable the entity to deliver on its mandate, we had to ensure good governance, and in so doing, reduce both the operational and financial risks; hence, we swiftly appointed the board of directors, an interim CEO, as well as the non-executive directors in April last year.
“Since then, tremendous work has been done in winding down the outstanding matters and getting governance arrangements going.
“For the entity to succeed, it must have a strong leadership with vision, common objectives, and the ability to develop managerial capacity. It is equally important for all employees to foster a new culture and a sense of community that encourages collaboration and teamwork, as well as transparent and honest communication.
As of May 1, a total of 388 employees have been transferred directly to SANPC from the three entities, along with assets such as the Rompco pipeline from Mozambique to South Africa, previously held by iGas, the Saldanha trading and storage facilities and associated infrastructure, previously owned by the SFF, and PetroSA’s upstream asset in Ghana.
Mantashe again lamented the decline of domestic refining, which is currently undertaken only at the Astron refinery, in the Western Cape, and the Natref refinery, in the Free State, while Sasol continues to produce fuels using its coal-to-liquids process at Secunda, in Mpumalanga.
“We cannot be complacent with a situation where local refining capacity accounted for about 80% of finished product consumed in 2010, compared to less than 35% in 2022,” Mantashe said.
“It is against this background that we fully support the SANPC in its concerted efforts to reinstate the PetroSA’s GTL refinery in Mossel Bay and to rebuild the erstwhile South African Petroleum Refinery (Sapref) in Durban,” he added.
Sapref, which ceased operations in 2022, had a nameplate capacity of 180 000 bbl/d, and was considered too small to remain competitive and also required significant investment to meet cleaner-fuel specifications.
The refinery was previously owned jointly by Shell and BP, but was sold to the CEF in May 2024 for about R1.
“The revitalisation of these assets underscore South Africa’s investment and growth strategy in the energy value chain geared to lay a solid foundation to address the challenges that lie ahead in the security of South Africa’s energy future,” the Minister said.
SANPC CEO Godfrey Moagi endorsed the Minister’s view that the new entity should play a role in refining, but also indicated that there was an intention to reinstate some of the tanking assets at Sapref more immediately to begin playing a role in the importation of petroleum products.
Chairperson Sipho Mkhize added that it planned to reach out to the authorities to seek permission to convert the single buoy mooring infrastructure, in Durban, which was established historically to facilitate the importation of crude oil, into a facility that could handle multiple products.
The new entity would also seek to play a larger role in the Western Cape liquid petroleum gas market and was assessing, together with PetroSA, two possible feedstock supply options to facilitate the resumption of refining activities in Mossel Bay.
It was also aiming to play a role in the development of liquefied natural gas import infrastructure, including at Coega in the Eastern Cape.
No details were provided about the financial position of SANPC, nor was any indication given as to how it planned to fund its growth plans.
However, emphasis was given to partnerships with the private sector, with Mantashe stating that, “for the entity to generate revenue for self-sustainability and sufficiency, it must take advantage of strategic partnerships”.