Nosizwe Nokwe-Macamo. Picture: FINANCIAL MAIL
Nosizwe Nokwe-Macamo. Picture: FINANCIAL MAIL

THE board of state-owned oil company PetroSA has finally suspended two of its senior executives, after two weeks of bickering that followed their rejection of a request for them to take gardening leave while the company investigates them for poor performance.

CEO Nosizwe Nokwe-Macamo and chief financial officer Lindiwe Mthimunye-Bakoro had refused to vacate their offices and threatened legal action, but on Friday, after consultations with Energy Minister Tina Joemat-Pettersson, the board sent them home.

The board, which is chaired by Nonhlanhla Jiyane, has been divided over the move, with two directors not supporting a threat to suspend Ms Mthimunye-Bakoro.

But on Friday, Ms Jiyane said the two had "been placed on precautionary suspension with immediate effect". She said the board needed "the opportunity to conduct an investigation into the financial performance of the company".

The investigation would look into their handling of key initiatives, including Project Ikhwezi, the much delayed search for new gas stock to feed Mossgas; a failed bid to take over Engen and a disastrous investment in Equatorial Guinea.

Mapula Modipa, PetroSA’s vice-president of human capital, will act as group CEO. Webster Fanadzo will act as chief financial officer.

PetroSA has been under severe financial strain after a series of business blunders.

Next month, the company is expected declare a loss of R9bn-R14.9bn, which would be the largest by any state-owned company. This is due mostly to an operating loss of R2bn and impairment on Project Ikhwezi. Ms Jiyane said R7.44bn had been spent on Project Ikhwezi by March 31.

The lack of progress on Project Ikhwezi was laid bare in an e-mail sent to board members by Frank van Baarsel, the project leader, who motivated for additional funds.

The project started with an R11bn investment budgeted for five wells, which, once operational, were expected to produce between 40-billion and 50-billion cubic feet of gas. Five years later, only three of the exploration wells were operational — and producing way below the required volumes.

Before the suspension, the board was divided over the drastic move, which was compounded by allegations last week that Ms Jiyane was "pushing her own agenda" by seeking the suspensions.

On Friday, she denied allegations that she wanted PetroSA to procure diesel and condensate through a Houston-based company, James Street Capital Partners. She said PetroSA had fair procurement processes and any company was allowed to share its ideas or proposals with PetroSA.

She said: "PetroSA in return shares the internal processes that must be followed should a request be to do business with PetroSA."

* This article was amended to show that two members of the board did not support the suspension of the CFO.