PetroSA faces up to R7 billion shortfall for facility closure — Daily Maverick
In South Africa, the state-owned oil and gas company PetroSA has a shortfall of between R6.6 billion and R7 billion to meet its obligations for the safe decommissioning and rehabilitation of onshore and offshore oil and gas facilities. Some of these assets are already non-operational or mothballed, and there is no visible plan to cover the shortfall, Daily Maverick reports.
According to the 2025 integrated annual report of its parent entity, the Central Energy Fund, PetroSA's rehabilitation liabilities are estimated at R10.1 billion. The report states that the company has R3.1 billion in earmarked rehabilitation funds, although another section says that R3.5 billion has been set aside in the special PetroSA Rehabilitation Company.
Cost assessment and liquidation risk
In 2020, an estimate cited in an auditor's report put PetroSA's total liabilities at R12.4 billion, while R2.8 billion had been reserved for these purposes. The current lower estimate may not cover some assets: the report says that plugged and abandoned wells were not included in the 2025 calculations.
According to the publication, the multibillion-rand liabilities are one of the reasons PetroSA was technically insolvent for a long time and unable to raise financing. In September, one of the company's suppliers, Nako Energy, applied to the High Court to liquidate PetroSA over a R600 million bill that, according to the supplier, had not been paid.
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Liabilities were not transferred to the new company
The new state-owned South African National Petroleum Corporation began operating as an interim subsidiary of the Central Energy Fund. It was intended to combine PetroSA, the South African Gas Development Company and the Strategic Fuel Fund, but only PetroSA's Trading Supply and Logistics division was deemed financially viable for integration.
PetroSA's other assets, including its rehabilitation liability, were separated as “legacy assets” requiring further work before a possible transfer. The public organisation Green Connection said in a submission to parliament that this effectively separates liabilities from the assets that could finance them, and that the costs could ultimately fall on the state budget.
South Africa has also repeatedly postponed the application of updated financial provisioning rules for rehabilitation to holders of rights issued before November 2015, including PetroSA. The Department of Forestry, Fisheries and the Environment expects to publish a new version of the amendments for public comment and implement them by the end of March 2027. The Ministry of Mineral and Petroleum Resources, the Central Energy Fund and PetroSA did not respond to Daily Maverick's requests for comment.
