OPEN SECRETS: PetroSA’s rehabilitation fund shortfall is a ticking timebomb
As PetroSA faces liquidation proceedings, the huge shortfall in funds to resolve its longstanding decommissioning liability is the elephant in the room. Due to delays in the implementation of up-to-date regulations, and politicians and executives seeming to turn a blind eye, the public may end up footing a multibillion-rand bill.
PetroSA, the former South African oil and gas company, is facing an enormous shortfall in funds earmarked for decommissioning its onshore and offshore operations. This financial gap has become a critical issue as the company navigates liquidation proceedings. The decommissioning liability, which involves the safe dismantling of its operations, is estimated to cost around R10.1-billion according to recent reports from the Central Energy Fund (CEF).
However, PetroSA has only set aside R3.1-billion, leaving a significant R6.6-billion to R7-billion gap. This shortfall has raised concerns about the potential environmental risks posed by the decommissioning process, particularly for the decommissioned or mothballed operations that are legally obligated to be safely decommissioned.
The Central Energy Fund (CEF) has been attempting to address this issue, but efforts have been hindered by delays in implementing updated regulations and lack of urgency from PetroSA and the Ministry of Mineral and Petroleum Resources. The situation reached a point where a new South African National Petroleum Corporation (SANPC) was formed, but the decommissioning liability was excluded as a "legacy" issue.
This has raised serious concerns about the financial risks that may fall to the South African government, ultimately burdening taxpayers.
Written by urgent.news from Daily Maverick's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
