CAPE TOWN, South Africa, February 12, 2025/APO Group/ --

The Portfolio Committee on Mineral and Petroleum Resources has welcomed progress in establishing the South African National Petroleum Company (SANPC), which is set to begin operation on 1 April 2025.

The process to establish SANPC was set in motion by President Cyril Ramaphosa during his State of the Nation Address on 13 February 2020 when he announced the government’s intention to repurpose and rationalise state-owned enterprises to support the country’s growth and development.

The committee is pleased with the work done thus far, following Cabinet’s decision on 10 June 2020 to merge PetroSA, iGas and Strategic Fuel Fund (SFF) into SANPC.

The merger project is facilitated under the umbrella of the Central Energy Fund Group, a Schedule 2 state-owned diversified energy company reporting to the Department of Mineral and Petroleum Resources.

The Chairperson of the committee, Mr Mikateko Mahlaule, said that the committee is particularly pleased with the report that a memorandum of understanding to seamlessly transfer employees from PetroSA, iGas and SFF to SANPC has been signed with organised labour.

“We welcome this clarity because employees are the primary agents of change, whose buy-in plays a critical role in the success of any project,” said Mr Mahlaule.

In October 2024, Cabinet approved submitting the South African National Petroleum Company Bill of 2024 to Parliament. The Bill establishes SANPC, but until it is passed into law, the company will exist under the CEF mandate derived from the CEF Act 38 of 1977 and Ministerial directives.

The committee, however, is deeply concerned about the process of transferring assets from PetroSA, iGas and SFF to SANPC. Of most concern is the unbundling of assets into viable and non-viables.

“We discourage the ring-fencing of non-viable assets with the intention of leaving them behind for fixing, because, in our view, this goes against the spirit of the merger, which is to address mandate overlap and optimise resources,” Mr Mahlaule said.

He also noted the concern that a second layer of responsibility will be added when non-viable assets are ring-fenced for fixing, because there must be a team of capable individuals appointed to fix such assets.