South Africa has consolidated three separate entities into a new state oil company to build a financially stable national energy leader.
The newly launched South African National Petroleum Company (SANPC), under the leadership of CEO Godfrey Moagi, brings together PetroSA, iGas, and the Strategic Fuel Fund—all previously part of the Central Energy Fund.
At the official launch on May 23, Minerals and Energy Minister Gwede Mantashe emphasized that this new structure reflects efforts to stabilize state-owned entities, improve efficiency, and realign them to support economic growth, job creation, lower living costs, and tackle inequality.
SANPC, chaired by former PetroSA CEO Sipho Mkhize, began operations this month. It intends to enhance state participation in oil and gas projects by combining the assets and financial strength of its predecessor organizations.
Speaking at the Johannesburg event, Moagi said the new company draws from international models like Petrobras, but adapts these strategies to meet South Africa’s unique needs and ambitions.
Mantashe outlined SANPC’s responsibilities, including securing energy supplies, developing infrastructure, adopting new technologies, and forging strategic partnerships.
He acknowledged that SANPC will navigate a complex global landscape marked by volatility and polarization, but added that domestic industrial growth and population trends will likely drive increased fossil fuel demand in the near future.
The company will lead the planning, coordination, and governance of South Africa’s petroleum sector. Mantashe reiterated the country’s goal to unlock upstream resources—particularly natural gas—even as environmental groups challenge such projects in court.
With Mozambique gas pipeline imports expected to decline by 2027, South Africa must quickly find replacement volumes, likely through liquefied natural gas (LNG) imports.
Mantashe criticized iGas for being inactive in managing the country’s gas infrastructure and expressed confidence that SANPC will take on a more proactive role.
He said SANPC must maximize the value of its offshore and onshore energy interests and ramp up efforts to improve local refining capacity.
Since 2009, South Africa has seen an 11% annual increase in fuel imports due to shrinking domestic refinery output and rising demand for refined products.
SANPC aims to restore balance by reviving the Mossel Bay gas-to-liquids (GTL) plant and rebuilding the South African Petroleum Refinery in Durban, both vital to strengthening the country’s energy supply chain.
Mantashe noted that in 2010, local refining met 80% of national demand, but that figure fell to under 35% by 2022, largely because international oil firms have pulled out of refining operations and converted facilities into storage.
He stated that these revitalization projects reflect South Africa’s broader strategy to attract energy investment and secure long-term stability.
To ensure SANPC’s success, the government appointed a board of directors in April 2023 to resolve governance issues early on. Mantashe stressed that financial sustainability remains a top priority for the new company.
source:www.upstreamonline.com
