Parliament turns away PetroSA, DoE officials

18th October 2016

By: Kim Cloete

Creamer Media Correspondent

  

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Parliament turned away PetroSA board members as well as Department of Energy (DoE) officials after they failed to submit a forensic report into the R14.5-billion loss incurred by the State-owned entity.

DoE director-general Thabane Zulu had prepared a presentation relating to the investigation into PetroSA’s R14.5-billion loss in the 2014/15 financial year, something the department largely attributed to the failed Project Ikhwezi, which was set up to find additional gas resources. However, Parliament’s Portfolio Committee on Energy said they wanted the final report that had been commissioned.

Committee chairperson Fikile Majola said the committee had asked Energy Minister Tina Joemat-Pettersson to commission a forensic investigation into PetroSA’s losses.

“We made a recommendation to the Minister to get a comprehensive report so that we could get to the bottom of what happened. We want the final report, not a presentation of the report,” said Majola, adding that the committee was “deeply concerned” about PetroSA’s substantial loss.

He added that they wanted a full explanation of what had gone wrong in the Ikhwezi gas project, which was an attempt to extend the life of the Mossgas plant by drilling new wells.  “We want a strong and viable entity, but we need to look at the problems so that we can deal with them.” He noted the department did not have the right to deny Parliament its right to see the forensic document.

Zulu said the investigative report was with Joemat-Pettersson.

“I felt duty-bound, as the accounting officer to this committee, to do a presentation that reflects on that report, while the other process is taking its course. The report is ready but needs to be looked at by the Minister, who will reflect on it,” he said.

MPs from across the political spectrum agreed that they needed to see the original forensic report. 

“We were told this report was finalised and ready to present to the committee three weeks ago already. It’s not on. Now you are creating the perception that this report will be sanitised,” said Democratic Alliance (DA) MP Pieter van Dalen

Fellow DA MP Gordon Mackay said the department and the PetroSA board could not dictate to Parliament what documentation it was entitled to.

ANC MP Motswaledi Matlala added that a mere presentation of the report was a “fruitless exercise”. He suggested shelving the presentation by PetroSA.

Meanwhile, the committee agreed to call for the full PetroSA board, DoE officials and the Minister to appear before the committee in early November. They would then have an opportunity to submit the forensic report and explain the problems on the project.

Findings of a technical investigation into PetroSA’s Ikhwezi project show that expected volumes had fallen about 90% below target, while gas had been produced from just three out of five wells.

A lack of proper risk mitigation, weak project governance development and weak or lacking risk mitigation were given as some of the reasons for the failure.

The first gas was achieved in December 2014 – 21 months later than planned – owing to the late arrival of the drilling rig, as well as other challenges.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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