The Central Energy Fund
Monies in the Central Energy Fund were collected from motorists for energy development purposes. This continued until 1988. The fund plays a funding role and is managed by the CEF board for that purpose.
During 1979, South Africa found itself in a situation where it could no longer obtain crude oil without paying a premium. The establishment of the Equalisation Fund became necessary to finance this premium by means of the collection of levies and the payment of subsidies. The Minister imposed a levy based on retail sales of petroleum products from January 1979.
Other activities of the fund have been to eliminate unnecessary fluctuations in the retail price of liquid fuel and to afford tariff protection to the synthetic fuel industry.
The assets and liabilities of the Equalisation Fund are managed by CEF, but are not controlled or owned by CEF.
Norad petroleum project
The Department of Energy and the Norwegian Agency for Development Co-operation (Norad) have agreed on a business plan proposed by the DME for the Norad petroleum project, which Norad has agreed to fund for about R22-million.
The objectives of the Norad project are to:
- Strengthen the capacity in the DME and associated regulatory institutions (Gas Regulator, Petroleum Pipeline Regulator, Petroleum Regulator, Gas and Petroleum Private Sectors and the SADC relevant structures/secretariats);
- Improve the quality of policy and legislation for South Africa and the SADC;
- Optimise the regulatory dispensation for the oil exploration and production sector to provide an internationally competitive industry;
- Develop strategies to empower historically disadvantaged South Africans and address gender issues in the upstream oil and gas and downstream liquid fuel and gas sectors; and
- Develop policies to encourage the use of natural gas;
CEF is assisting the DME in managing and implementing the Norad project, including financial services, audit services, procurement, appointment of project manager, legal services and contract services for contract staff.
CEF Chairperson’s Fund
This fund makes large contributions to three Western Cape universities for petroleum geology training. The state, through CEF and UTT, provide two-thirds of the funding for this programme.
As part of its empowerment initiatives, the DME established UTT in 1995. It is funded by exploration and production licencees who are required to contribute $100 000 to the trust. The UTT is managed by Petroleum Agency SA and it awards bursaries for training in oil and gas exploration and production skills.