Mungo Soggot
The Office of the Auditor General has appointed an oil trading expert from London to probe the government’s sale of about R2- billion worth of oil earlier this year.
The government quietly sold off 25-million barrels – the bulk of South Africa’s strategic oil stock – in March and transferred R800-million of the proceeds into the budget. The United Democratic Movement blew the whistle on the sale, accusing the government of selling the oil below market prices.
Government officials denied this. The Minister of Minerals and Energy, Penuell Maduna, said the government had decided it was no longer necessary to have such a large stockpile.
Maduna said an undisclosed amount of the proceeds of the sale had been transferred to the state oil company, the Central Energy Fund (CEF). The sale took place when oil prices were at their lowest in about 10 years.
Auditor General Henri Kluever confirmed this week his office had appointed Sally Clubley, of accounting firm Deloitte & Touche in London.
Clubley’s terms of reference will require her to probe the “appropriateness of the sale”.
“Ms Clubley is therefore required to critically evaluate the trading strategy followed by the Strategic Fuel Fund [part of the CEF] association in relation to these specific transactions,” her terms of reference say. “It should be borne in mind this evaluation may become a matter of public record and may need to be discussed before Parliament’s public accounts committee.” Clubley’s report is due at the end of the month.
The investigation of the oil sale takes place at a time of considerable tension between the Office of the Auditor General and the Ministry of Minerals and Energy. The Office of the Public Protector is conducting a major inquiry into the handling of the state oil company’s accounts following Maduna’s accusation in Parliament last year that Kluever was party to impropriety in the company.
The inquiry resumes next month despite the fact that Maduna’s lawyer has conceded that the minister’s main attack on Kluever – that he covered up the theft of R170-million – was unjustified.