State oil company PetroSA has placed its top three executives – including the chief executive – on gardening leave due to poor performance.
The three – chief executive Nosizwe Nokwe-Macamo‚ chief financial officer Lindiwe Mthimunye-Bakoro and acting vice-president of upstream operations, Andrew Dippenaar – were this week given 24 hours to accept the leave request from the board or face suspension.
The move echoes that of Eskom‚ whose board under former chairman Zola Tsotsi in March, suspended its four most senior executives.
After a court challenge‚ its former chief executive‚ Tshediso Matona‚ left the utility‚ but the details of the probe have not yet been made public. In a letter sent to the three PetroSA executives‚ the board said the forced leave related to their handling of key initiatives‚ including Project Ikhwezi; a failed bid to take over Engen and a disastrous investment in Equatorial Guinea.
The board‚ chaired by Nonhlanhla Jiyane‚ was locked in a meeting until late on Wednesday night. PetroSA spokeswoman Zama Luthuli, said the board was “engaging” with the three “with a view to them being placed on leave pending an investigation into their performance and company-related matters”.
PetroSA would consider the appointment of an interim management team pending the outcome of the discussions‚ Luthuli said. The leadership vacuum is likely to negatively affect the company‚ which is already under strain.
Last year‚ PetroSA impaired its production and exploration assets by R3.4-billion‚ largely because of delays and rising costs in Project Ikhwezi‚ which aims to prolong the life of the Mossgas gas-to-liquids plant by seeking resources southeast of the gas field.
In January‚ Business Day reported how PetroSA’s plans to enter the fuel retail market were scuppered after Malaysian oil giant, Petronas, pulled out of a deal that could have seen it take control of Engen.
The deal‚ worth about R18-billion‚ was set to transform PetroSA from a primary supplier of fuel to a major player with an extensive distribution and retail network‚ but the Malaysians pulled the plug on it a week before Christmas due to a lack of funding. The Treasury was not convinced by the business case made by PetroSA and there was concern that its balance sheet could not carry the debt.
Six years ago, the company had cash holdings totalling R11-billion‚ but that shrunk to a figure of R5-billion by last year. Furthermore‚ in West Africa the company incurred more than R2-billion in losses through its investment in what is referred to as Block Q in the waters off Equatorial Guinea. Sources at PetroSA on Wednesday said Energy Minister Tina Joemat-Pettersson had held a joint meeting with the Central Energy Fund – of which PetroSA is a subsidiary – and PetroSA.
Joemat-Petersson is said to have expressed her dissatisfaction with PetroSA executives at the meeting. Her spokeswoman‚ Zodwa Visser‚ did not respond to e-mailed questions.
The South African Communist Party‚ which has been critical of the oil giant’s management‚ welcomed the move to sideline the three executives.