The inaugural board of the South African National Petroleum Company (SANPC) has been announced by Mineral Resources and Energy Minister Gwede Mantashe, who also confirmed Godfrey Moagi as the State-owned company’s interim CEO.

The board will be chaired by former PetroSA CEO Sipho Mkhize and is expected to manage the winding down of the three Central Energy Fund (CEF) Group of Companies entities that are being merged to form the SANPC, namely PetroSA, iGas and the Strategic Fuel Fund (SFF).

The SANPC will be incorporated as a subsidiary of CEF Group of Companies until the National Petroleum Bill is promulgated into law, the department said in a statement.

The Bill was introduced to Parliament in November and the public comment period was extended until mid-January. It indicated that the proposed new State-owned entity would focus primarily on oil and gas exploration and production, as well as midstream and downstream operations and infrastructure, but also outlined a broad mandate empowering the proposed entity to acquire, generate, manufacture, market or distribute “any form of energy”, including renewable energy.

The department reports that a lease-and-assign model is being employed in the interim, whereby certain assets of the merging entities will be leased to the new company.

“The proposed Lease and Assignment model provides the opportunity to strategically select what is leased and assigned to the SANPC by ring-fencing or isolating PetroSA’s legacy assets such as decommissioning liability and current operating challenges of the gas-to-liquids refinery.”

Out of the three merging entities, only iGas and SFF are financially viable to be merged into the new entity, with the only financially viable PetroSA division being Trading Supply and Logistics.  

The remainder of the business that does not form part of the SANPC will form part of legacy assets requiring further work before they can be transferred into the SANPC.

“This approach will improve the financial risk profile for SANPC to secure funding as well as provide a legally sound solution to deal with the constraints associated with the non-profit status of SFF,” the department said.

It argued that the SANPC was poised to become a leading player in South Africa's energy sector, adding that “with the combined strengths of the three subsidiaries, a solid financial position, and robust stakeholder support, the SANPC is well-positioned to leverage these benefits and seize the R95-billion market opportunity. 

The SANPC is poised to become a leading player in South Africa's energy sector, ensuring energy security, driving new technologies, developing, and enabling essential infrastructure, fostering strategic partnerships, and propelling social and economic development.

Besides Mkhize and Moagi the other nonexecutive directors appointed by Mantashe are: Nosizwe Nokwe-Macamo; Dr Nompumelelo Siswana; Lauren Petersen; Makgola Makololo; Sam Moleko; Phumeza Zimasa-Dhlamini; Emaride Pumzile Kedama; and Mxolisi Koyo.

The nonexecutive directors of the legacy entities, meanwhile, are: Unati Figlan (chairperson); Ditsietsi Morabe; Brenda Moagi; Llewelyn Delport; Tembinkosi Bonakele; and Mmete Petrus Fusi.

“The appointment of these high calibre professionals could not have come at a better time when the CEF Group management teams are at an advanced stage in finalising the merger of iGas, PetroSA and SFF into a new South African National Petroleum Company,” Mantashe said in a statement.