The South African National Petroleum Company (SANPC) is now officially open for business, following a one-week delay to its initial launch. The company, together with its parent organisation, the Central Energy Fund (CEF), confirmed on Wednesday that a formal agreement has been reached with both unionised and non-unionised staff from the merging entities — iGas, PetroSA, and the Strategic Fuel Fund (SFF). This agreement clears the way for SANPC to begin operations as a fully-fledged subsidiary of the CEF.
The establishment of SANPC as South Africa’s new state-owned petroleum company follows the National Treasury’s approval under sections 51(g) and (h) of the Public Finance Management Act of 1999. While its incorporation as a subsidiary within the CEF Group is currently a temporary measure, it is expected to remain in place until the National Petroleum Bill is enacted into law.
To commence operations, SANPC will employ a Lease and Assignment model, allowing it to lease specific assets from the merging entities. This approach will enable the strategic selection and ring-fencing of assets, avoiding direct exposure to PetroSA’s legacy challenges, including decommissioning liabilities and ongoing issues at the Gas-to-Liquids (GTL) Refinery.
This model is designed to enhance SANPC’s financial risk profile, thereby increasing its ability to attract funding while also addressing legal constraints tied to the non-profit status of the SFF. According to CEF, the operationalisation of SANPC is expected to reduce the country’s dependency on imported refined fuels, improve energy security, positively influence South Africa’s balance of payments, and retain key industry expertise and capabilities within the country.
As outlined in the approved business case, an initial group of 402 employees from the 1,022 total staff across the merging entities will be transferred to SANPC in the first phase of the transition. The remaining 620 employees, linked to ring-fenced assets still undergoing optimisation within PetroSA, will transfer during the second phase once turnaround efforts are completed with support from both SANPC and CEF.
In the meantime, work has commenced to address legacy challenges, including efforts to reinstate the GTL Refinery, develop a methodology for decommissioning liabilities, and overcome limitations posed by SFF’s non-profit designation. Once these matters are resolved, the relevant assets will be ready for integration into SANPC.
As the new company embarks on this next chapter, SANPC and CEF have pledged to protect existing jobs and ensure that no worker is left behind in the transition process.