PRESENTATION TO THE PORTFOLIO COMMITTEE ON MINERALS AND ENERGY 24 OCTOBER 2007

Transcription

1 PRESENTATION TO THE PORTFOLIO COMMITTEE ON MINERALS AND ENERGY 24 OCTOBER 2007

2 CEF GROUP STRUCTURE CEF (Pty) Ltd incorp. EDC and NEEA Chairperson B Mabuza CEO - M Damane Central Energy Fund 100% SFF ASSOCIATION Chairperson B Mabuza CEO M Damane 100% PETROSA Chairperson P Molefe CEO S Mkhize 100% Petroleum Agency SA Chairperson L Makatini CEO M Xiphu 100% igas Chairperson M Damane COO M de Pontes 100% OPCSA Chairperson M Damane CEO P Coetzee 100% SANERI Chairperson M Damane CEO K Nassiep 49% Bannietor Mining

3 PERFORMANCE MEASURES 2006/2007 Contribute 5 MW towards South Africa's Renewable Energy target of 10,000GWH by 2013 Weight Target Achieved Finalise participation agreements for 5MW landfill gas projects Obtain project approval for landfill gas - Prepare project evaluation documents for internal approvals Ensure long-term profitability of CEF (Pty) Ltd Make Investment decision in respect to LSF project Apply for Mining licence - Prepare a detailed market strategy document - Finalise feasibility study - Negotiate and finalise joint venture relationships - Produce an implementation plan with financial indicators Investigate utilising EyeSiswe's torbanite reserves Make investment decision regarding biodiesel projects Sasol project - PetroSA project Obtain at least R3m from donor agencies for developmental projects Establish working relationships with at least two other agencies. - Obtain R3m in grant funding for development activities and awareness Build internal CDM expertise with a view to start trading in 2007/ Attend training/conferences

4 PERFORMANCE MEASURES 2006/2007 Weight Target Achieved Invest in alternative and cleaner energy technologies that will improve the quality of life for low income households through more affordable and safer energy sources Finalise at least 2 other developmental projects Continue feasibility studies - Finalise plan for Basa njenjo magogo project - Board approval Finalise and accept at least 1 other project from "Commercial Projects under review" Progress feasibility studies for 1 commercial renewable energy project Investigate the viability of Bio Fuels industry Perform desktop study together with IDC - Participate in National Biofuels Task Team. - Employ consultant to prepare biofuels task team report - Finalise feasibility studies for ethanol Partner with GTZ to identify feasible projects Agree terms of participation - Identify at least one commercial biofuel opportunity

5 PERFORMANCE MEASURES 2006/2007 Manage investment in subsidiaries to ensure good governance and sustainability Weight Target Achieved Monitor performance of subsidiaries against board approved objectives Quarterly subsidiary board meetings Review and approve long term plans and strategies Signed shareholders compacts Communication Strategy within CEF, Group and External Stakeholders Appoint Public Relations Officer - Develop and implement communication strategy Provision of services by support functions to internal departments and subsidiaries

6 PERFORMANCE MEASURES 2006/2007 Project Implementation Weight Target Achieved Oversee final implementation of Bethlehem Hydro Finalise power purchase agreement - Finalise engineering and construction plan - Board and management participation - Ensure transfer of skills Oversee Darling Windfarm Demonstration Project Finalise Power Purchase Agreement - Finalise engineering and construction plans - Board and management participation Implement the Solar Water Heating Project in collaboration with UNDP/GEF as per Ministerial Directive Implement pilot phase - Receive and house test rig at SABS - Implement monitoring mechanisms for energy savings - Report to Minister on project results

7 PERFORMANCE MEASURES 2006/2007 Weight Target Achieved Johanna Solar Obtain reserve bank approval and make investment - Board participation - Begin discussions with licence authority PTIP snd South African consortium - PV road map for SA Jathropha pilot project Negotiate NDA - Appoint consultant - Assess landowners readiness for the project - Project steering committee participation Biotherm Finalise discussions with PetroSA - Investigate potential to increase equity stake - Make investment decision TOTAL

8 CEF GROUP RESULTS 2006/7 (R m) CEF PETROSA PASA OPCSA IGAS SANERI SFF TOTAL 2005/6 Gross revenue - 8, , ,689.7 Cost of sales - (6,118.5) - (0.4) (6,118.1) (4,437.4) Gross Profit - 2, , ,252.3 Interest received , Finance costs (136.9) (297.8) - - (29.8) - - Other income (464.5) (471.5) Operating expenses (39.9) (993.8) (47.5) (11.8) (0.6) (64.5) 1.3 (1,156.8) (992.3 Operating Profit Associate income Profit before tax Tax (8.2) 3,052.6 (5.5) 3,047.1 (317.9) (30.4) 29.5 (0.9) (17.6) 3, ,369.7 (343.7) 2,918.4 (9.6) 2,908.8 (92.9) Profit/(loss) after tax 55 2, (0.9) ,026 2,815.9 Consolidation entries (75) (2.5) (7.9) Total , (0.8) ,015 2,827.8

9 CEF GROUP 2006/7 RESULTS (contd) CEF projects Torbanite Significant progress on feasibility study Project approach will lead to both oil extraction and electricity generation Basa Njengo Magogo program adopted to enhance clean coal use Bio fuels Biodiesel : 20million litre biodiesel project using canola Ethanol : CEF/IDC partnership ( Eastern Cape and Hoedspruit project at bankable feasibility stage) Johanna Solar RSA investment decision made Methane Gas projects PetroSA refinery 4.1 MW project switched on; Developing a number of Municipal land fill gas projects

10 CEF GROUP 2006/7 RESULTS (contd) Energy Efficiency CFL investment in assembling and burning lines Darling Demonstration Wind Farm Construction at advanced stage switch on expected in January 2008 Nelson Mandela Bay Metro Contractual agreements for landfill gas management, efficient street lighting, hydro, SWH and wind development UNDP/CEF SWH Project Pilot 500 stage completed testing for energy savings in progress Carbon trading business launched No risk approach that ensure full carbon value captured for RSA

11 PETROSA Positive impact on revenues due to high crude prices Continued focus on cost containment Annual Maintenance shutdown Brass exploration (R856 million) Capex focus on South Coast Gas Project (R1 135 million) and Brass Exploration (R87 million) R690m Dividend

12 IGAS Significant progress on Coega LNG Power Plant Rompco Dividends (R29,5 million)

13 PASA Continued focus on role as Designated Agency Licensing Round Relinquishment of OP26 Processing applications Continental Shelf Claim Project

14 SFF Significant increase in demand for storage at Saldanha Prospecting Permits to AEMFC AEMFC subsidiary of CEF

15 OPCSA Increased activity in Saldanha Bay due to increased demand for storage Marketing operational activities to Government Agencies

16 DORMANT COMPANIES Liquidated: - Mosshold - Soekor E & P Deregistered - Enerkom - Enerkom Products Other entities required for business

17 CEF THE FUTURE Torbenite Project (Oil and electricity) Biofuels Darling Wind Farm Johanna Solar Biomass/Landfill Gas Gellification/ Safer use of Paraffin ( Pilot in progress) Solar Water Heaters CDM Energy Efficiency CEF Sustainability (NMB Metro) SASDA AEMFC

18 PETROSA THE FUTURE South Coast Gas GTL and COD Commercialisation using LTFT Exploration for feedstock and non-feedstock Refining facilities New Fuel Specifications Downstream Opportunities

19 igas THE FUTURE Rompco Expansion Project Started Coega LNG Regasification Plant to supply GAS to a Power Generation Plant for continuous electricity to the Eastern Cape Gas Distribution Network within the Coega-IDZ Feasibility study of at least two gas transmission pipe lines

20 SFF THE FUTURE Obtain finality on strategic stock policy and implement Management of crude oil Environmental liability at Ogies

21 OPCSA - THE FUTURE To be the recognised Oil Spill Response Company in South Africa To expand the market share to 60% in short term and 80% in medium term Department of Transport and SAMSA Manage SFF environmental liabilities at Ogies Establish a presence in Sub Sahara Africa To enter into agreements with Middle East oil producing countries whereby OPCSA will perform all pollution prevention and control services on their behalf in the longterm Form international alliances with other players in the field

22 SANERI THE FUTURE Ensure long term health of energy research capacity in the country and assist in stimulating a culture of innovation in the energy research environment Energy Efficiency and demand side management - Assist to achieve national strategy of 12% reduction in final energy demand by Demand side management include load management The impact of energy use on the environment The role of energy in stimulating socio-economic development Cleaner fossil fuel development, including clean coal technologies Renewable energy Alternative energy Energy planning and modeling Energy policy research

23 SANERI THE FUTURE (contd) Energy R&D Agenda Develop a comprehensive energy R&D agenda for SA Baseline study of existing research capacity Flagship project development Knowledge, Data and Project management system development Human Capital Development and Transformation Establish Chairs of Energy Research e.g. Energy Efficiency, Energy Policy Research, Fuel cells & Hydrogen economy Establish Renewable Energy & Sustainable Energy Hub Established at University of Stellenbosch Cooperative Energy R&D Activities Strategic alliances with established research institutes

24 AEMFC Confirm geological reserves - Perform drilling and coal analysis - Retrieve/find or buy old borehole information Build resource-reserve database system - Develop a database of all boreholes (JSE listing requirement) Apply for mining licence - Conclude BEE transaction - Complete a mining work programme - Complete a social and labour development plan - Complete environmental management programme report (EMRP)

25 AEMFC (contd) Conclude BEE Equity Participation - Develop a policy/procedure to identify prospective BEE partners - Conclude shareholders agreement Negotiate off-take agreements - Identify coal markets - Negotiate supply agreements Resolve Xstrata Royal Payment Dispute - Submit application for a Declaratory Order or; - Attack the validity of Xstrata validity of mining permit and breach of contract Identify strategic equity investment (RBCT, coal, base metals, drilling cbm etc) - Develop a diversification strategy - Identify possible takeovers/jv - Perform Due Diligence