We are gathered here today to officially launch the South African National
Petroleum Company (SANPC) as a Southern African Petroleum champion
supporting the region’s energy needs.

This marks a significant turning point in our process of stabilising state-owned
entities, improve their business models and competitiveness, and in so doing,
repurpose them to support the country’s drive for inclusive economic growth, job
creation, reducing the cost of living, as well as alleviation of poverty and inequality.
It is this process that resulted in the merger of the three Central Energy Fund (CEF)
subsidiaries – iGas, Strategic Fuel Fund, (SFF), and PetroSA - to allow the state to
meaningfully participate in the oil and gas developments by optimising the operating
assets and financial resources of these entities.

Building on the success of the stakeholder engagement in November last year, this
gathering further provides us with an opportunity to unpack SANPC’s value
proposition and its strategic play in its quest to become a leading player in the
Petroleum sector, tasked with ensuring energy security, driving new technologies,
developing and enabling essential infrastructure, and fostering strategic partnerships.
In the wake of evolving global megatrends, including the persistent push to shift away
from fossil fuel usage, the SANPC is expected to operate in an increasingly volatile,

unpredictable, and polarised world. Notwithstanding the shift in demand towards
cleaner sources of energy production, the increasing population and the need for
industrial growth in the short-to-medium term, means the demand for fossil fuels is
expected to rise for the foreseeable future.
To this end, the SANPC is expected to oversee strategic planning, coordination, and
governance of the country’s petroleum resources, and thereby contribute to the
country’s sustainable development and inclusive economic growth. For the entity to
generate revenue for self-sustainability and sufficiency, it must take advantage of the
strategic partnerships and national capabilities in the energy industry to champion
energy supply and investment in associated infrastructure.

With the ever-growing demand for natural gas, in addition to the supply constraints,
as well as inadequate petroleum development due to pressure from lobby groups
against oil and gas developments, our nation is set to experience a gas deficit in the
coming years. Although iGas has historically been a successful, yet inactive, custodian
of South Africa’s gas infrastructure, the SANPC is expected to become an active
participant in gas infrastructure.

The entity will have to ensure that maximum value is extracted from the interest it holds
in various blocks, including the blocks off the Southern African coast, while positioning
itself to capitalise on the shifting demand towards cleaner based energy sources.
Since 2009, South Africa has experienced a 11% year-on-year growth in imports of
fuel relative to local market production. This increase has largely been driven by a
decline in local refinery capacity and the simultaneous increase in demand for
refined product. We cannot be complacent with a situation where local refining
capacity accounted for about 80% of finished product consumed in 2010, compared
to less than 35% in 2022.

For far too long the South African refining capacity has been largely held by
International Oil Companies (IOC), with many of them pulling out of manufacturing
capacity, and many small to mid-scale refineries being converted to storage units,
South Africa’s liquid fuels supply and economic stability is increasingly vulnerable.
The SANPC will need to ensure sufficient access to refined product, and thereby, fulfil
its mandate of providing energy security to South Africa in line with the SANPC Bill

which designates the entity to manage strategic oil reserves and storage of crude oil
on behalf of the state.
It is against this background that we fully support the SANPC in its concerted efforts
to reinstate the PetroSA’s Gas-To-Liquids (GTL) refinery in Mosselbay and to rebuild
the erstwhile South African Petroleum Refinery (SAPREF) in Durban. The
revitalisation of these assets underscore South Africa’s investment and growth
strategy in the energy value chain geared to lay a solid foundation to address the
challenges that lie ahead in the security of South Africa’s energy future.
To enable the entity to deliver on its mandate, we had to ensure good governance,
and in so doing, reduce both the operational and financial risks; hence, we swiftly
appointed the board of directors, an interim CEO, as well as the non-executive
directors in April last year. Since then, tremendous work has been done in winding
down the outstanding matters and getting governance arrangements going.
We are particularly pleased with the progress made in the transfer of employees and
assets from the three entities to the SANPC. It is, therefore, essential for the SANPC
board and the management to ensure that this entity builds sufficient technical
capacity and skilled workforce for the success and viability of the entity. For the entity
to succeed, it must have a strong leadership with vision, common objectives, and
ability to develop managerial capacity. It is equally important for all employees to foster
a new culture and a sense of community that encourages collaboration and teamwork,
as well as transparent and honest communication.
In conclusion, a task at hand for all of us is to ensure that the entity remains financially
sustainable and independent in order to fulfil its developmental mandate.

I thank you.