The State-owned Central Energy Fund (CEF) is considering buying assets that have been put on the block by fuel and chemical maker Sasol as it seeks to restore itself to profitability.

The CEF “needs to put an end to the losses” at its units, including oil company PetroSA, chairperson Monde Mnyande told lawmakers on May 12. “We are looking at those and discussing very strongly with Sasol” what assets that we can acquire, he said.

It remains unclear how the CEF will fund any deals -- its balance sheet is already stretched, and the government has said it can’t afford to provide additional funding to state companies.

PetroSA has been the biggest drain on the CEF. It last made a profit in 2013, and lost R14.6-billion in the year through March 2015 -- a record for any state company at the time -- mainly because of an impairment on its offshore Ikhwezi natural-gas project.

A bid by PetroSA to buy Petroliam Nasional Bhd’s stake in Cape Town-based fuel retailer Engen Petroleum, collapsed in 2015 when South Africa’s National Treasury denied its request to borrow internationally to fund the deal.

“It’s still early days” and there are no further details over any acquisitions, CEF spokesperson Jacky Mashapu said in an emailed response to questions.

Sasol needs to cut debt and is trying to avoid raising capital through a $2-billion rights offer. “We do not comment on ongoing commercially sensitive and/or M&A processes and we do not react to market speculation,” the company said by email.

The CEF didn’t reply to questions about production at PetroSA’s sole fuel plant, the 45 000 bl/d Mossel Bay gas-to-liquids refinery, which has been running out of gas feedstock and has been operating at a fraction of capacity as a result. The company in 2016 said it was reconfiguring the plant.

Business Day, a Johannesburg-based newspaper, reported on the CEF’s acquisition plans on Monday.