PetroSA's plans to revamp the Mossel Bay gas-to-liquid fuel refinery face significant hurdles due to financial instability, lack of gas supply, and allegations of corruption.
South Africa 's state-owned oil company, PetroSA, is facing mounting scrutiny over its plans to refurbish the Mossel Bay gas-to-liquid fuel refinery. The project, initially valued at R3.7 billion, involved a partnership with Russian-owned financier Gazprombank and politically connected businessman Mulaudzi's Equator Holdings .
However, the deal appears to be unraveling after revelations that Equator Holdings, despite lacking experience in the gas industry, secured a massive tender to refurbish PetroSA's offshore gas infrastructure. Concerns have been raised about the legitimacy of the contract, particularly after Equator Holdings was liquidated in March 2024 for failing to pay a soccer player.Further complicating matters, draft internal audit reports and correspondence obtained by amaBungwane indicate that Gazprombank failed to deliver the promised funding of $200 million or even the $3 million required for a feasibility study. This financial instability, coupled with the uncertainty surrounding the gas supply, has led to criticism from experts and watchdog organizations. The Organisation Undoing Tax Abuse (Outa) expressed concern about the lack of financial prudence and the potential for political interference in the project. Chirs Yelland, managing director of EE Business Intelligence and energy expert, questioned the necessity of refurbishing the refinery given South Africa's lack of oil and gas reserves.He also highlighted the challenges associated with restarting a mothballed refinery, including the need for extensive repairs, new pipelines, and a reliable gas supply. The project's timeline is further complicated by the ongoing disputes and allegations of corruption surrounding the procurement process. Yelland pointed out that even if the refinery were revived, it would be difficult to meet modern petroleum standards due to the age and inefficiency of South Africa's remaining refineries. Many have already shut down, leaving the country reliant on imports to meet its liquid fuel needs
Petrosa Mossel Bay Refinery Gazprombank Equator Holdings Gas Supply Corruption South Africa Energy Sector
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