By Mpho Moloi
South Africa’s Mineral and Petroleum Resources Minister, Gwede Mantashe, is advancing efforts to establish a robust, state-owned petroleum company, asserting that fear of corruption should not impede progress in South Africa’s energy sector. Speaking at the African Energy Week in Cape Town, Mantashe emphasised the need for a single, consolidated petroleum entity to drive the nation’s energy goals, which include ramping up gas and oil exploration as part of a diversified energy mix.
The South African government is currently working through the legislative process to merge existing state-owned petroleum and gas entities, including the Petroleum Oil and Gas Corporation of South Africa (PetroSA), under a new national company, the South African National Petroleum Company (SANPC). However, challenges around corruption and management are looming, with Mantashe aiming to dispel these fears while making a case for a government-led approach to managing the country’s oil and gas resources.
“I’m not a subscriber to this belief that everything must not be done because there’s corruption. Every activity smells corruption; therefore, we must be inactive and do nothing,” Mantashe said, rejecting the notion that corruption should paralyse energy sector reform.
Mantashe Pushes for Energy Diversification Through Oil and Gas Exploration
In response to South Africa’s energy crisis, Mantashe is advocating for increased gas and oil exploration, which he views as essential to a sustainable energy future for the country. The Minister has long argued for a diversified energy mix, especially given South Africa’s heavy reliance on coal and recent challenges in securing a stable electricity supply. Expanding exploration activities could offer alternatives that reduce this dependency, while also creating potential economic benefits, including job creation and foreign investment.
By developing SANPC as a centralised body for petroleum resources, Mantashe aims to establish a streamlined, transparent structure that prioritises South Africa’s energy needs over private interests. “A single, state-owned petroleum company is necessary to move the sector forward,” he added, stressing the importance of a unified approach.
PetroSA’s Role in the SANPC Merger and the Path to Operational Stability
One of the entities to be integrated under the SANPC is PetroSA, South Africa’s primary state-owned oil company, which has struggled financially in recent years. PetroSA’s CEO, Xolile Sizani, was suspended just eight months into his role, signalling possible management or operational issues that have yet to be fully disclosed. Although Mantashe declined to comment on Sizani’s suspension, he insisted that PetroSA would not be transitioned into SANPC until it is operationally stable.
“PetroSA will not be transferred to the South African National Petroleum Company until it’s operationally sound,” Mantashe stated, underlining his commitment to ensuring that the new national petroleum company starts on solid ground. This insistence reflects Mantashe’s broader strategy of strengthening governance and operational standards within South Africa’s energy sector.
Transparency in Tackling Corruption Concerns in South Africa’s Energy Sector
The Minister’s remarks come amidst growing concerns around corruption within state-owned entities, which have been under intense scrutiny in recent years. Mantashe addressed these concerns directly, highlighting the government’s approach to transparency and the institutional frameworks designed to combat corruption.
“We are transparent about how we deal with them [corruption concerns]. And that makes it appear as if we have more corruption than other people because we are talking about it, we are exposing it, and we have put up institutions to deal with them,” Mantashe explained, suggesting that openness can sometimes create a misconception of widespread corruption.
Mantashe’s stance reflects a broader government commitment to transparency, particularly within the energy sector, which has seen multiple corruption investigations over the past decade. His statements signal an intention to move forward with confidence, despite past issues that have at times hindered progress within state-owned entities.
The Legislative Road Ahead for SANPC
As the legislative process for establishing SANPC continues, Mantashe and his department will need to secure parliamentary approval for the consolidation of entities under the new company. This legislative groundwork is crucial to ensure SANPC operates within a clear regulatory framework, enabling it to function effectively in the long term.
The proposal has sparked discussions within parliament and among industry stakeholders, with some welcoming the move towards a state-led petroleum company, while others remain cautious. Concerns persist over whether SANPC will be able to function without falling into the traps of mismanagement and corruption that have plagued other state-owned companies.
South Africa’s Growing Energy Demands and the Role of SANPC
South Africa’s growing energy demands highlight the importance of expanding its energy sources. With an ever-increasing need for electricity and fuel, and amid ongoing load-shedding issues, the call for a diversified energy mix has become more urgent. A state-owned petroleum company like SANPC could play a pivotal role in meeting these demands, particularly if it can improve South Africa’s capacity for domestic oil and gas production.
The establishment of SANPC could also open doors for international investment, attracting foreign entities interested in the country’s potential for gas and oil resources. South Africa’s strategic location, coupled with the presence of oil and gas reserves, presents an opportunity for the country to become a regional player in the energy market.
Industry Reaction and International Comparisons
The concept of a state-owned petroleum company is not new in Africa, with countries like Nigeria and Angola already operating national oil companies that manage and regulate oil production and sales. For South Africa, which has been heavily reliant on imported oil, establishing a state-owned petroleum company represents a significant shift. The move towards a single, national entity could enable South Africa to leverage its resources more effectively and reduce reliance on foreign oil imports, particularly as global oil prices remain volatile.
Industry experts and energy stakeholders have responded with a mix of optimism and caution. While many see the benefits of a centralised, transparent approach to petroleum resources, some question the feasibility of the government maintaining strict control over such a vast sector. Analysts have also pointed out the financial risks involved, especially if the company fails to meet operational standards or succumbs to political pressures.
Download Here:
Read all our publications on magzter:
https://www.magzter.com/ZA/Central-News-Pty-Ltd/Central-News/Newspaper/All-Issues
_______________________
Central News also offers Sponsored Editorial Content, Podcasts , Radio / Social Media Simulcast, Video Production , Live Streaming Services, Press Conferences, and Paid Interviews (Video/Audio) etc.
We guarantee exceptional exposure, reach, and engagement, with an excellent return on investment.
Advertisement:
To place your advert on our platforms (Print Newspaper or Digital Platforms) : Please email : sales@centralnews.co.za
For Business Related:
business@centralnews.co.za
Newsroom:
Send your Stories / Media Statements To: newsroom@centralnews.co.za
General Info:
info@centralnews.co.za
Office Administrator:
admin@centralnews.co.za
Whatsapp / Call: 081 495 5487
Website: https://www.centralnews.co.za
Social Media Platforms (@centralnewsza) : Linkedin, Facebook, Tiktok, Twitter, Instagram, Youtube
#centralnewsza #freestate