petro-sa

Fatal incident claims the lives of two PetroSA employees

As far as could be ascertained, the two men were overcome by toxic gases when working on a vessel at the Mossel Bay plant.

PetroSA acting group CEO Kholly Zono said in a media statement on Wednesday morning that PetroSA employees were traumatised by the fatal incident that claimed the lives of a mechanical fitter and an operator on Tuesday afternoon at the Gas to Liquid Refinery in Mossel Bay, reports the Mossel Bay Advertiser. Read more…

3160_CEF_SouthAfrica_Logo

Refocused CEF strategy yields improved financial results.

Tuesday, 08 November 2016                                  MEDIA STATEMENT                                                 

CEF SOC Ltd, South Africa’s national energy utility returns to profitability and celebrates a historic unqualified audit opinion issued by the Auditor General (AG).

Highlights for the 2015/16 financial year:

  • Recorded a net profit of R259 million (2014/15: loss of R14.2 billion)
  • R600 million invested into the renewable energy programme
  • R4.5 billion B-BBEE committed
  • R52.4 million spent to uplift most vulnerable communities
  • The normalised profit after tax is R2.8 billion
  • R7.4 billion generated from operations
  • Cash balance sitting at R16.2 billion
  • R2.2 billion invested in growth projects
  • Group balance sheet grew by 13% from R31.3 billion (201415) to R35.4 billion (2015/16)
  • Group generated revenue totalling R20.7 billion

Speaking at the release of the 2015/16 annual integrated financial results in Parliament today, Acting-Chief Executive of CEF, Mr Godfrey Moagi said “following an extensive implementation of the group’s strategy, the Group returned to profitability despite the low global oil prices. We focused our energies in stabilising the business operations of the Group geared to strengthen our long term financial sustainability”.

Moagi added: “Despite the massive fall in the crude oil price, the Group generated cash of R7.4 billion from operations and invested R2 billion into capital expenditure projects. For the period under review, the Group had amassed a cash balance of R16.2 billion, which in the future will be deployed into sustenance and growth projects.

The improvement in performance was largely due to the increase in demand for crude storage, and improved performance of Rompco, an associate company which owns gas pipeline from Mozambique, and an increase in coal sales.

During the year under review, the Group raised a R345 million loan to fund the capital expenditure for the PetroSA operations. The Group has appointed a panel of transaction advisers who will assist in raising R3.4 billion to support mining projects. An amount of over R1 billion has been set aside for two renewable projects (gas-to-power) that have been approved by the Board to contribute to the security of energy supply in South Africa.

The increase in revenue of R2.2 billion is attributable to income from rotation of strategic stock, tank rental income and coal sales.

“However, the Group’s comprehensive income for the year under review was negatively impacted by a loss of R764.000 from PetroSA due to a decrease of R2.3 billion in revenue. This decrease is attributable to low production volumes at Mossel Bay Gas-To-Liquids Refinery and a decrease in the basic fuel price.

In addressing these institutional challenges, we have been hard at work developing a turnaround plan for PetroSA. We’ve also been engaging with the relevant statutory bodies with a view of finding a solution to the decommissioning liability,” he added.

The Group is also pleased to announce that other entities within the CEF SOC Ltd fared much better year on year. The Strategic Fuel Fund (SFF) generated revenue totalling R4.5 billion, State mining company AEMFC also recorded an unprecedented upswing in performance that resulted in an increase in revenue to R376 million (2014/15: R235 million).

Gas development state agency (iGas) generated a profit of R148 million. The company has assets valued at R2.93 billion and at year end held cash reserves of R535.1 million.

“Over the next few years, the Group will be making strategic investments to put the company back into the growth trajectory. PetroSA will spending over R3bn with plant modifications and upgrades to improve refining capacity. This will also include an investment of about R500 million in Sales and Marketing assets to enhance its presence and customer service. AEMFC has appointed a panel of transaction advisors who will assist in raising R3.4 billion capital for mining project” Moagi said.

For more information, contact:

Jacky Mashapu

Corporate Affairs Manager

Cell: 071 485 6856

Email: jackym@cefgroup.co.za

 

3160_CEF_SouthAfrica_Logo

SFF Chevron expression of interest CEF response media release

1 July 2016                                               Media Statement                                                                                                                                                                           Response from CEF Group on SFF’s Expression of interest to Chevron SA The CEF Board of Directors met to consider reports that the Strategic Fuel Fund has expressed interest in acquiring Chevron SA assets. The board established that these reports were correct and that the actions of SFF did not comply with governance requirements. The CEF Board have accepted the resignation with immediate effect, of the Chairman and the Acting CEO of SFF and have resolved to urgently address the gaps in governance compliance at SFF and across the CEF Group of companies. The CEF Board regrets the impact of this occurrence to Chevron SA, who are a valued industry partner. The Group further regrets the perceived misalignment with the Minister of Energy and the Department of Energy. End Enquiries: Kesebonem@cefgroup.co.za

3160_CEF_SouthAfrica_Logo

Details on the rotation of strategic crude oil stocks by SFF

It is important that that the context in which the Strategic Fuel Fund (SFF) took the decision to rotate crude oil stocks is properly clarified for the benefit of all stakeholders.

In October 2015, SFF decided that the model currently used for strategic stocks needed to be varied. The model that SFF currently have for storing emergency crude oil is an outdated model based on the experience of sanctions and is not currently best international practice for the holding of strategic crude oil stocks.

During the era of sanctions, the pre-1994 government stored a vast quantity of strategic crude oil stock and procured most of the commercial crude oil stock required by the domestic refineries. At that stage, security of supply was attained through the storage of crude oil for strategic stock for 5 years and supplying the commercial crude oil requirements to the domestic refineries as the country had surplus refining capacity and was therefore self-sufficient in terms of security of supply. This stockpile was last sold in in 1999 to Sasol and Total to fund the fiscus.

The pre-1994 business model meant that SFF had a huge amount of working capital tied up for very long periods of time (15 years) until the rotation of stock. This decreases rather than increases economic value due to the loss of value through long term storage.

If we consider then the current situation, it is not the first time that rotation of strategic stock has occurred in South Africa. As indicated the current government rotated strategic stocks in 1999 and only replaced them in Saldanha in 2001. During this period, the country did not have a single barrel of strategic crude oil stock and nor were the Saldanha tanks filled as is currently the case.

The grades stored by SFF for strategic crude oil stocks were based on producing a slate of products for Clean Fuels 1 and lubricant manufacture. The grades which need to be repurchased for strategic stock are different and will have to be Clean Fuel 2 grades. SFF will also have to diversify to refined petroleum product storage as part of strategic stock.

Rotation of strategic stock has therefore both technical and economic benefit for the country. Storage of crude oil for a long periods of time (in our case since 2001) results in

the deterioration of the quality of the crude oil and reduction in the volume. Moreover rotation in a low price crude oil market results in the preservation of the value intended and is an attempt to increase that value. There are at least four margins to be extracted from the rotation which enhances economic and financial value.

Moreover, for a company such as SFF which operates in a single part of the value chain there is no multiple profit centres and therefore the company cannot operate on a unit of sale basis. The company rather functions on a total contribution model and any further incremental value is generated through marginal economics from the same value source.

It is important to note that since 1994, the government has not granted SFF any funding for the holding of strategic stock, which is the current global practice when an agency holds strategic stock on behalf of Government.

What are Strategic Oil Reserves?

Strategic stocks of petroleum products are defined as both crude oil and refined products held by Governments to safeguard the country’s economy, and help maintain national security during an energy crisis caused by severe oil supply disruption or catastrophes.

Strategic stocks are only available under declared emergencies and are not to be used for operational supply disruptions. The role of government is to ensure that there is sufficient crude oil stock that can be accessed in case of an emergency.

The Strategic Fuel Fund (SFF)

SFF is the state owned entity, established by the South African government in 1967 to manage strategic crude oil stocks. During the UN led crude oil sanctions against the previous government, the SFF mandate was extended to include purchases of commercial crude oil supplies. Post 1994, SFF’s role changed to that of procuring and managing strategic crude oil reserves.

SFF derives its mandate from the White Paper on Energy (1998), Crude oil and Petroleum Strategic Stock Policy (2000), National Energy Act, Central Energy Act (1977), Ministerial Directives and the Agency Agreement.

SFF owns two storage facilities, Saldanha and Milnerton tank farms situated in the Western Cape. The Saldanha facility is the bigger of the two with 6 on the ground storage tanks with a capacity of 45 million barrels.

The Decision for Rotation

The Rotation of the Strategic Stock is financially and economically advantageous to government as SFF will generate more than US$ 15 million on the storage or a R180 million per annum over a period of five years. The alternative economic value proposition of the stock laying in tank is that it could lose about 1% of the stock per annum.

Moreover, this was dead stock which tied up SFF’s working capital. SFF has through the rotation reduced the burden on the working capital and ensured that SFF is able to ensure security of supply in new ways while simultaneously generating income. The alternative to the rotation of Strategic Crude Oil Stocks is that Government will have to fund SFF from the fiscus for some R7 to R10 billion depending on the price of crude oil and product stock which is a big ask from National Treasury considering the pressing Government infrastructural development priorities.

Globally the models for the holding of strategic stock have also changed. In many countries Government no longer completely funds the holding of strategic stock.

Stock rotation in December 2016

In December 2016, following a Ministerial Directive from the Department of Energy, 10 million barrels of crude oil stock was sold to the following companies: Vitol/Vesquin, Venus Trade/Glencore and Taleveras based on a transparent market related price formulae. The sold stock pile still remains in tank at the SFF Saldanha terminal with SFF having the first right to buy the crude oil and supply the market in the event of a crisis. Furthermore the department of Energy is engaging the National treasury on the treatment of the transaction.

<<< End >>>

3160_CEF_SouthAfrica_Logo

Statement issued by the Central Energy Fund on the SFF rotation of strategic stocks.
26 May 2016

The Board of the Central Energy Fund has noted the article in the Business Day of 26th May 2016, titled “Strategic Stock sold off secretly”. We wish to correct the impression created by the article that there are issues based on the misunderstanding of the management of strategic stock. The article makes particular incorrect assertions, which if not corrected may create uncertainty in an already volatile oil market.

We have to emphasise that Strategic Stocks are managed through Ministerial Directives and this case was no different. The notion that the country is put at risk through this rotation is factually incorrect.

We wish to re-iterate that no approval is required from the Minister of Finance (MOF) to sell or rotate strategic fuel stocks.

It should also be noted that when the SFF started the process of the rotation of strategic stocks, the country had 21 days reserves of strategic stocks. After the December 2015 rotation, the country now has access to 90 days reserves which is 30 days more than the required volumes. This allows for South Africa to be able to absorb any market variations and provides a buffer for 3 months in the case of any eventuality.

We wish to reiterate that the integrity of the Strategic Stocks is secured and that the Group will be able to respond to any challenge should it arise.

 

Enquiries:

Mr Tseliso Maqubela, Director, Central Energy Fund, 082 450 9224

Mr Vukani Khulu, Group Stakeholder Advisory Manager, 083 276 3283

29-pic

Vast majority of SA’s offshore oil and gas blocks already under licence, application

Interest in oil and gas exploration off South Africa’s coast has, in the past four years, accelerated to such an extent that nearly all the country’s offshore exploration blocks are under licence or under application for exploration by independent companies, Petroleum Agency SA geologist Jonathan Salomo told delegates at the Gas Africa conference.

“There has been a dramatic change in the last few years, which has been driven by new legislation, neighbouring offshore finds and a sustained high oil price. This has been further bolstered by Petroleum Agency SA’s own efforts to attract explorers,” he said.

Producers were also looking for supply alternatives to the oil-rich, but politically unstable, Middle East oilfields and have been further attracted by recent legislation in terms of the Mineral and Petroleum Resources Development Act, which Salomo argued had provided a degree of risk-share with the South African government.

Offshore exploration activity over the past two years had produced some 21 000 km2 of three-dimensional survey data and over 36 200 km2 of two-dimensional data.

While emphasising that an accurate quantification of South Africa’s offshore oil and gas potential remained elusive, at present, Salomo maintained that, based on geological modelling and long-term predictions, Petroleum Agency SA, which promotes exploration for onshore and offshore oil and gas resources, had estimated prospective offshore oil and gas resources at 21.75-billion barrels and 62.4-trillion cubic feet respectively.

Of this, 10.2-billion barrels of oil and 27.7-trillion cubic feet of gas was attributed to prospective resources along the West Coast of South Africa, while 9.55-billion barrels of oil and 25.5-trillion cubic feet of gas was estimated for blocks off the country’s South Coast.

“Prospective resources along the East Coast of the country are estimated at two-billion barrels of oil and nine-trillion cubic feet of gas. I must, however, emphasise that these figures are not yet proven,” he outlined.

Among the largest offshore oil and gas projects currently under way was the Ibhubesi gas project off the West Coast – a joint venture between South African national oil company PetroSA and Australian independent energy group Sunbird Energy.

This project would see the development of a 400-km-long gas pipeline, two shorecrossing sites – one between Grotto Bay and Duynefontein and the other on the Saldanha Peninsula – and the construction of an onshore gas-receiving facility near Ankerlig, in the Western Cape.

“The offshore field is expected to begin production in late-2017, early 2018, with an initial flow rate of 100-million standard cubic feet of gas a day,” Salomo said.

Along the South Coast, several global energy groups were embarking on shallow and deep-water exploration, while interest in the blocks along South Africa’s East Coast had largely been driven by recent discoveries in nearby Mozambique and elsewhere in East Africa.

Energy giants ExxonMobil and Total, besides others, had secured exploration licences along this coastline.

ONSHORE INTEREST

Salomo added that interest in onshore oil and gas exploration drilling had also increased in recent years, driven by reports of a massive shale gas deposit in the Karoo basin.

“There is a high level of interest in onshore activity, despite carbon exploration still being in its infancy. While the Karoo basin was explored for oil in the 1960s and 1970s, new interest in the region has been driven by interest in coalbed methane, shale gas and biogenic gas,” he commented.

Noting that Petroleum Agency SA believed the shale gas deposit to be “significant”, Salomo said the group estimated the recoverable resource of this deposit at 40-trillion cubic feet.

Coalbed methane exploration, meanwhile, was largely focused in the Lephalale and Mopane sub-basins, in the north of the country, and was estimated by the agency to offer prospective resources of 17.9-trillion cubic feet.

NATALIE GREVE

ENGINEERING NEWS

27 AUGUST 2014

 

28-pic

PetroSA rethinks Mossel Bay gas terminal

Plans to establish a floating liquefied natural gas (FLNG) import terminal in Mossel Bay will no longer be pursued, PetroSA said on Tuesday.

The decision was made by the Petroleum Oil and Gas Corporation of SA (PetroSA) and the country’s National Oil Company (NOC), it said in a statement.

The location was found to be technically and commercially problematic, according to a feasibility study.

The study found meteorological and oceanographic conditions in Mossel Bay were severe and increased the logistical and gas supply costs of the project.

PetroSA said it had been investigating the possibility of importing LNG to supplement dwindling gas reserves in Mossel Bay since 2008.

It proposed the importation of LNG into Mossel Bay through a terminal which would float on the ocean.

Natural gas, found underground, is liquefied through a cooling process which makes it easier to store and transport.

The gas is cooled to about -160 Celsius, which shrinks its volume up to 600 times. The liquid is stored and transported by ship to various terminals where it is returned to a gas at a regasification facility and piped to consumers.

PetroSA Group CEO Nosizwe Nokwe-Macamo said the company would explore other location options.

“The good thing about this exercise is that the results of these feasibility studies will be put to good use in other projects in the medium to long-term.”

She said PetroSA had studied the 13 operational FLNG terminals in countries, including Argentina, Brazil, and the United Kingdom.

“The main distinguishing factor between these FLNG terminals and the one that was proposed for Mossel Bay is the fact that all of them are located either in very well-protected ports, very near the shore, or are located on very calm rivers,” she said.

SAPA

28 August 2014

 

27-pic

Government ready to move forward with fracking

Government says it is ready to regulate and monitor companies that have expressed an interest in exploring shale gas in the country.

Thibedi Ramontja, the Director-General of the Mineral Resources Department, said the draft regulations will, once finalised, be effective to deal with the risks that exploration might pose to the environment.

Ramontja was briefing the Portfolio Committee on Mineral Resources on its progress in finalising the regulations for petroleum resource development.

“The draft regulations, once finalised, will result in a regulatory framework that ensures safe extraction of gas, which will contribute to diversification of South Africa’s energy mix, energy security supply, significantly boost South Africa’s economy and have positive effects on the Gross Domestic Product,” he said.

The department first halted new applications for exploration rights in 2011 to investigate the impact that the process would have on the environment, and an interdepartmental task team was set up to head this process.

The investigation also looked at ensuring that fracking would not affect astronomy research projects linked to the Square Kilometre Array (SKA) project in the Karoo. After the investigation, the draft regulations for petroleum exploration and exploitation were published for public comment in October last year.

Ramontja said government would consult interested and affected stakeholders next month, before finalising the regulations to allow exploration to begin.

He said while it was too soon to estimate the gas reserves, economic contribution and how many jobs the projects would create, he said companies – local and international – would not have shown interest if they did not anticipate to make profits.

Ramontja added that shale gas will not only create a new industry, but also present South African higher education institutions with research opportunities that are expected to produce Masters Degrees and PhDs.

SANews

27 August 2014

 

25-pic

CNG could keep Mossel Bay GTL plant alive

PetroSA is understood to be considering importing CNG to keep its 45,000 barrel per day Mossel Bay GTL refinery operational, although it has abandoned plans to import LNG.

While PetroSA has not publically announced the CNG plans, Interfax understands that in April the company sent out a request for advice pertaining to a project to import 80 PJ (2.1 billion cubic metres) of CNG per year from Sasol’s gas fields in southern Mozambique.

The basic outline of the project is to pipe gas from Sasol’s central processing facility near Inhassaro in Mozambique 200 km south via an onshore pipeline, to an offshore loading bay facility in Inhambane. The CNG would then be shipped approximately 1,850 km to a receiving terminal at Mossel Bay and piped 20 km to the Sasol’s GTL facility.

Interfax understands PetroSA has already signed a memorandum of understanding (MOU) with Sasol Petroleum International to negotiate a sales and purchase agreement for gas from the project from Sasol’s Pande and Temane fields in southern Mozambique. Sasol could not confirm an MOU had been signed at the time of going to press.

Sasol already supplies gas to its South African network from Pande and Temane via an 865 km pipeline.

PetroSA announced on Tuesday it would no longer pursue a project to import LNG via an FSRU at Mossel Bay because the location was too technically and commercially challenging. A feasibility study conducted by WorleyParsons “found meteorological and oceanographic conditions in Mossel Bay are severe and would inevitably increase the logistical and overall gas supply costs of the project”, the national oil company said in a press release.

The challenging location would not necessarily hinder CNG imports, however, which require “minimal facilities with a significantly smaller footprint compared with LNG”, said Lyndon Ward, marketing director for Calgary-based maritime CNG specialists Sea NG.

The volumes and relatively short distances involved in importing gas from Mozambique into Mossel Bay also favour CNG. “CNG systems are typically

less costly than LNG when the transport distance is less than 2,000 km and the volume is below 14 million cubic metres per day,” Ward added.

While costs vary from project to project, estimates for the transportation tariff to import around 2.1 bcm of gas over 1,500 km would be around $4-5/MMBtu – plus gas supply costs – based on a 15-year term, according to Sea NG calculations.

Three-year countdown

PetroSA’s GTL plant is already running at 50% of its capacity because of dwindling feedstock. Gas supplies from PetroSA’s FA-EM and South Coast gas fields, as well as the Oribi and Oryx oilfields in Block 9, are expected to dry up completely within the next two-to-three years.

A maritime CNG import project – which could theoretically be online 26-30 months after an FID – could just about meet PetroSA’s feedstock deadline.

However, for now PetroSA is focusing on bringing new domestic gas fields online. The company started drilling at its F-O field, 40 km southeast of its FA production platform off South Africa’s southern coast, in January 2013. Gas from the first of the five wells in the programme is expected before the end of 2014, a spokesperson told Interfax. Drilling is scheduled for completion in mid-2015.

French oil major Total also started exploratory drilling in South Africa’s deep offshore this summer. Gas from Block 11B/12B, around 175 km from Mossel Bay, could also be used to supply the GTL facility. However, exploration is still in the very early stages.

SouthCapenet

28 August 2014

22-pic

2014 Budget Vote speech by the Deputy Minister of Energy, Ms Thembisile Majola

Deputy Minister of Energy, Thembisile Majola

LADIES AND GENTLEMEN

I would like to add my voice in thanking the millions of our people who have once again placed their faith and confidence in the African National Congress. We are humbled and will not betray that trust.

The ANC government has correctly identified energy as an apex priority for the attainment of economic growth in the fight against the triple challenges of unemployment, poverty and inequality. It is with the overwhelming mandate that you have given us, that we are here today to outline how we plan to tackle the scourge of jobless growth in a very challenging global economic environment.

We do this as part of a larger collective of government across its three spheres. We are cognisant of the fact that we cannot do this alone and will work together hand in glove with our people and organised formations of business and civil society.

The National Development Plan (NDP) has outlined the need for an energy sector that promotes economic growth and development, promotes social equity through expanded access to energy services and environmental sustainability through concerted efforts to reduce pollution and mitigation of the effects of global climate changes. The ANC Manifesto identified the access to reliable energy supply in all its forms, as a priority for this administration.

Honourable members,

The Head of State, President Zuma’s 2014 State of the National Address has put energy at the centre of economic development for the country. The right combination of policies and technologies is strategically important to ensure that the links between economic growth, the increasing energy demand and the associated energy related carbon dioxide emissions is managed as we increase our energy generation capacity. It is thus important that our energy policies address issues of energy access, sustainability, affordability and appropriate quality of service for the end user. I will expand on this matter a little later in my speech.

The Department of Energy and the State Owned Companies for which it is responsible, have a mandate, collectively, to ensure that security of energy is not only about the provision of electricity, liquid fuels and gas. Security of energy is also about their sustainable utilisation, affordability and accessibility for our people, business and industry. It is with this very clear understanding and appreciation of its urgency that the energy plans we are developing for the short, medium and long term need to be supported by effective policies, strong institutions and human resources, effective governance, as well as a regulatory framework that addresses the critical needs for skilling and skills transfer, youth unemployment and localisation of energy inputs so as to grow our local industries.

We have been elected on a mandate that prioritised energy security and our responsibility as the executive is to ensure that the policy trajectory is in keeping with an optimum and efficient energy mix. The roll out of the renewable energy programme has been applauded in a number of

quarters however there seems to be reluctance to embrace the totality of this energy mix that our people have called for. Coal will continue to be a major source of energy both for liquid fuels and electricity. We are a country blessed with abundant coal reserves. It is imperative that we provide leadership in the cleaning of our coal for energy production. This is a resource we can ill-afford not to exploit.

As part of the energy mix we remain resolute in our belief that the potential for shale gas in the Karoo basin needs to be exploited. This resource has the potential to create a new industry and associated skills. The need to ensure that this is exploited with great care to the environment cannot be over-emphasised. The use of imported gas will continue and efforts to explore for more gas off shore will also be accelerated. We are aware of a major international oil company whose drilling rig is about to move into place in the Southern Cape beginning what we believe will be an exciting phase for South Africa.

Honourable Speaker

The infrastructure for liquid fuels has served this country for a number of decades. In addition to the 20 year liquid fuels plan, the department will conduct a vulnerability assessment of existing fuel import, manufacturing and distribution infrastructure. This will be done to test the resilience and its ability to respond to various events. The liquid fuels sector has witnessed some changes in the past decade, however we believe that it offers the greatest opportunity for radical economic transformation. In this regard the department will work very close with the Trade and Industry department to identify an approach that can accelerate transformation in this sector. Honourable Speaker,

State owned entities are a critical component in the implementation of our energy policies. It is with this in mind that we have begun a process of ensuring that we work very closely with our state-owned enterprise (SOEs) so as to ensure that we provide policy guidance and support, where required. Strong, focused and well governed entities are required for meeting the challenges of energy security for South Africa. The department is currently engaged in discussions and providing support to the Central Energy Fund (CEF) Group that will finalise the on-going restructuring process this year. In the State of the Nation Address the President had identified CEF as one of the institutions that will require restructuring to align with the need to respond to challenges and opportunities in the energy sector.

We are acutely aware of the urgency to expedite the finalisation of the Integrated Energy Plan (IEP), the updated Integrated Resource Plan (IRP).These policy development processes are urgent and necessary for the industry. We ask that you bear with us as we strive to ensure that these policies serve both the purpose of providing policy certainty, as well as ensuring energy security, support development of local industries, job creation and skills transfer.

Allow me Honourable Speaker to reiterate the democratic government’s commitment to give concerted attention to energy efficiency. There is a role for each and every one of us. We all need to know how much energy we consume in households, in our small enterprises and indeed by each of the major industrial users. Once we know, we are in a better position to identify where we can make reductions. The energy consumption I am referring to includes electricity, liquid fuels, natural and petroleum gas. Inefficient appliances need to be discarded. When purchasing vehicles, fuel efficiency must be a key consideration. The department and the National Energy Efficiency Agency within South African National Energy Development Institute (SANEDI), working with amongst others the National Business Initiative will ensure that energy efficiency programmes touch every facet of our lives. These programmes will include the implementation of the Smart Grids and the Energy Efficiency Tax incentive Schemes.

As already alluded to by the Minister, nuclear energy plays an important role in the energy security of our country. Going forward, the Nuclear Energy Company of SA (Necsa) will play a pivotal role in the localisation of our nuclear build programme which is in line with our energy policy and in particular the IRP 2010. I would like to pause here so as to emphasise a point we

often forget or conveniently over look. We have been utilising nuclear to produce energy to decades, and in fact, our host city Cape Town is basically powered by nuclear energy. We have the requisite expertise and know how to ensure continued safe utilisation of nuclear for power generation. On the new nuclear build programme, the department is cognisant of the fact that providing regulatory oversight over the new nuclear build project will require a strengthened and better capacitated regulatory body. Together with the National Nuclear Regulator (NNR), the department will ensure that capacity enhancement for both human capital and facilities continue to be the strategic thrust of the regulator over the MTEF period.

Over and above this, the NNR is in discussions with various stakeholders to establish a Nuclear and Radiation Safety Centre of Expertise to create a pipeline of skills. This centre, which will be housed in one of the local universities, will involve collaboration of the NNR with its international partners, as well as local stakeholders.

The National Radioactive Waste Disposal Institute (NRWDI) was established during the 2013/14 financial year with a mandate to fulfil the institutional obligation of managing the disposal of radioactive waste on a national scale. The Board of NRWDI is currently working with the department to ensure the operationalisation of the Institute.

The National Energy Regulator of South Africa (NERSA) as the country’s energy regulator will, over the medium term, be focusing on improving oversight of the regulated industries by conducting compliance audits and inspections, issuing licenses and setting tariffs. NERSA will do the above in order to encourage investment in the sectors, encourage new entrants and improve competition. Honourable members, if we are to achieve the energy vision as contained in the National Development Plan, skills development in the energy sector is of critical importance. Given the planned energy infrastructure investments, the country will require a substantial investment in technical skills such as engineers, technicians, artisans and project/ programme managers. The department will be engaging with relevant stakeholders in both the public and private sector to address the above challenges. In the meantime the department has formed partnerships with the Energy and Water SETA as well as Chemical Industry Sector Education and Training Authority to increase the scope of energy training in order to meet the skills needs in the energy sector. The critical skills identified are catered for in the approved sector skills plans of the aforementioned SETAs. We will leverage the benefits of the massive investment in the energy sector by ensuring that our departmental programmes display a greater degree of responsiveness to needs of our people such as the empowerment of women and the youth, whether it is through the Integrated National Electrification Programme (INEP), the roll-out of the Solar Water Heating Programme, the Independent Power Producers Programme (IPP) or the transformation of the liquid fuels sector. We will continue to strengthen interventions and programmes aimed at capacity building among vulnerable sectors to enable their meaningful participation in the energy sector in support of the country’s transformation agenda.

As part of the Decade for Women as declared by the African Union, we will expand our involvement in the Southern African Development Community (SADC) region through various programmes which include a planned workshop on Clean Energy Education and Empowerment to be held next month. The objective of this workshop is to increase participation and awareness of opportunities in the clean energy sector in our continent.

Honourable Members, a month ago we lost one of our female staff members at the hands someone she trusted. The department will follow up on the criminal proceedings and give support to the grieving family. We also intend to embark on an awareness campaign for our staff to sensitise them about gender based violence and abuse. None of us can afford to turn a blind eye while the scourge of gender based violence continues to affect our society, our communities and

our homes. The socialisation of our young boys and girls is key if we are break this cycle of violence and build responsible citizens that know their rights, but also understand appreciate that these are to accompanied by responsibilities.

Honourable member the energy programmes require a capable department that is able to respond with the necessary agility. To this end we will review the structures of the department, ensure that there are the requisite skills and ability to meet the urgent demands imposed by the need for security of energy. This we will extend to the State owned entities as they are an important component for the implementation of our policies and plans. Conclusion Honourable members having been with the Energy Portfolio for a short while, I believe that as a country we have the commitment and the ability to respond to the His Excellency, President Zuma’s call for the radical transformation of the energy sector. The Department of Energy and its entities is ready to meet the challenge, and working together we can achieve more. I thank you all on behalf of Team Energy.