The South African National Petroleum Company (SANPC), a new state-owned petroleum company, was formed after a policy statement was made by President Cyril Ramaphosa on Wednesday, Cape {town} Etc reports.
The SANPC was formed after the Central Energy Fund (CEF) subsidiaries, iGas, PetroSA and the Strategic Fuel Fund merged.
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The SANPC (South African National Petroleum Company) is set to play a key role in the country’s energy sector, aiming to ensure stable energy supply, promote new technologies, build crucial infrastructure and form strategic partnerships.
According to the South African Government News Agency, the company will also manage South Africa’s petroleum resources, contributing to economic growth.
SANPC was recently approved to start operating under the Public Finance Management Act of 1999. This new state-owned company was announced by President Ramaphosa in his 2020 State of the Nation Address as part of a plan to streamline state-owned enterprises.
In June 2020, the Cabinet approved a proposal from the Department of Mineral Resources and Energy to merge three companies – iGas, PetroSA, and the Strategic Fuel Fund (SFF) – which are part of the Central Energy Fund (CEF).
The merger is designed to improve efficiency. However, only two of the companies – iGas and SFF – are financially stable enough to be fully merged into the SANPC. As for PetroSA, only its trading division and assets in Ghana will join SANPC, while the rest of PetroSA’s business will remain separate for further work before it can be included.
For now, SANPC will be part of the CEF Group of Companies until the National Petroleum Bill becomes law.
To begin operations, SANPC will use a ‘Lease and Assign’ model, which means certain assets from the merging companies will be leased to SANPC.
This approach helps manage financial risk, ensuring the company can secure funding, while also dealing with PetroSA’s outdated assets, such as its Gas-to-Liquid Refinery.
SANPC is also working on resolving these legacy issues before transferring all of PetroSA’s assets.
Overall, SANPC believes the merger and its financial stability will allow it to become a major player in the energy sector, taking advantage of a R95 billion market opportunity.
The company is confident it will help secure energy, develop new technologies, and drive economic and social progress in South Africa.
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