THURSDAY, 10.30AM
MOSSGAS confounded its critics by doubling operating profit in the year to March to R715-million, but is also seeking government approval for an additional R1-billion investment to bring the EM field on stream.
The increase in profits from last year’s R532-million (1994/95, R517m) was achieved on higher oil prices, increased production volumes and tight cost=control. The latest figures represent a forex saving to the state of R1,4-billion on the crude oil it would otherwise have had to import.
Mossgas CEO David Day on Wednesday requested government approval for a R1-billion investment to develop the EM field in the Bredasdorp basin, some 45kn from Mossgas’s current working platform. Day told Parliament’s mineral and energy affairs committee the gas field could extend Mossgas’s life by up to 15 years. The new investment would be in addition to the R910-million that Cabinet approved last year for development of the FA satellite field.
Despite its apparent profitability at present, Mossgas has been a black hole that has swallowed billions of taxpayers’ rands. Day pointed out that the R715-million cash flow is not strictly a profit, as it was paid to the Central Energy Fund to offset some of the more than R11-billion loaned by the state to set up Mossgas. The debt currently stands at R10,6-billion, less than expected, given that it includes the R910-million for developing the satellite fields.
Day, however, said Mossgas should continue, and that it should be allowed to list on the Johannesburg Stock Exchange and be given the same opportunities as Sasol had received to move from a protected environment into a succesful enterprise.