PetroSA

Postal address
PO Box 307
Parow
7500

Telephone
+27 (0)21 938-3911

Fax
+27 (0)21 938-3144

Visit the PetroSA website:

www.petrosa.co.za

The Petroleum Oil and Gas Corporation of South Africa (PetroSA) is a wholly owned subsidiary of CEF and its main activities include the exploration and production of crude oil and natural gas off the southeast coast of South Africa.

Its vision is to be a leading integrated provider of oil, gas and petrochemicals in African and global markets. PetroSA contributes to South Africa's development by creating value out of the country's indigenous crude oil and natural gas resources.

Its mission is to commercially explore, produce, refine and market oil, gas and petrochemicals for the benefit of customers and stakeholders through innovation, quality products and empowered employees.

PetroSA also participates in international upstream petroleum ventures, refining operations converting offshore gas and condensate to synthetic fuels and marketing them to the local market as well as high-volume chemicals internationally.

The company opened a new PetroSA office in Houston, Texas, in September 2006 that will give power to its marketing efforts and allow it to sell more product in its biggest international market.

PetroSA manages the strategic assets and crude inventory on behalf of the State and in terms of a sub-agency agreement between SFF and PetroSA and also ministerial directives issued by the Minister of Minerals and Energy. The objective is to maximise the return on these strategic assets by means of futures contracts, storage options and tank rental agreements.

Operations

PetroSA was formed in July 2000 out of a merger of the business of Mossgas and Soekor to effectively develop and exploit the crude oil and gaseous hydrocarbon resources of South Africa. Mossgas and Soekor were established by CEF in terms of the CEF Act of 1977.

The refining operations convert natural gas and condensate into liquid fuels and produce petrochemicals. This is done at PetroSA’s gas to liquids (GTL) plant in Mossel Bay, which is provided with gas produced from the offshore E-M and F-A gas fields. The GTL plant, the first of its kind in the world, produces 35 000 barrels of final product per day on average.

PetroSA produces petrol (97 octane leaded, 95 octane unleaded); diesel; kerosene; fuel oil; LPG; propane; light and heavy alcohols; liquid oxygen and nitrogen; and carbon dioxide.

The products are distributed through oil companies under their own brand names in the Southern Cape and parts of the Northern and Eastern Cape. Alcohols, as well as small quantities of transportation fuels, are exported worldwide.

The government has given Mossgas permission to implement plans for the development of additional gas fields.

There is also international interest for improved GTL technology, of which PetroSA has vast and unique experience. Work is under way at Mossel Bay to refine the Fischer Tröpsch technology used at the GTL plant and to market it.

Exploration

PetroSA has considerable and valuable experience operating offshore South Africa. Established in 1965 for the purpose of oil and gas exploration in South Africa, PetroSA discovered its first viable gas reserves in 1980. This led to the Mossgas project. Oil was discovered in 1989 and brought into production in 1997.

PetroSA has developed distinct homegrown technologies and operational methods that are superior to those used by many countries and companies around the world. Its technological advancement is an asset to South Africa and the African continent.

PetroSA has reached 15-million barrels from the Oribi field, while exploration of the adjacent Oryx field started in May 2000. Oryx is still being exploited, while a large oil field, known as Sable, was discovered in 1999. First production from Sable was achieved in late 2003.

PetroSA produces oil from its Oribi and Oryx oilfields at an average rate of 24 000 barrels per day and recoverable reserves from these fields are estimated to be 22-million barrels in total.

PetroSA owns a drilling rig, the Omega, and has an 80 percent interest in a floating oil production facility, the Orca. The Omega is also leased on the international drilling market. The Orca has been dedicated to the production of the Oribi and satellite oil fields.

PetroSA has vast exploration plans in Africa including in Namibia, Gabon, Equatorial Guinea, Nigeria, Mozambique, Algeria and Sudan.

The South Coast Gas Project

Situated more than 80km into the sea on the Southern Cape coast, this $450-million project is expected to produce enough gas to satisfy demand until at least 2013. It comprises a partnership between PetroSA (55 percent) and US firm Pioneer Natural Resources (45 percent). Production is expected to begin during the second half of 2007 and increase to an average of approximately 100 million cubic feet per day of gas and 3 000 barrels per day of condensate over the initial phase of the project through 2012.