State-owned oil company PetroSA has revealed that it needs to conclude several strategies within the next four years in order to sustain its operations, as well as set the platform to increase its South African market share to 25% by 2020.

The group, which currently only supplies about 5% of the nation’s fuel requirements, is reliant on a single income source, which, with feedstock expected to be depleted by 2016, is unsustainable. The group’s “constrained size” hampers its role in industry transformation, says PetroSA CEO Nosizwe Nokwe-Macamo.

Operational capacity, infrastructure, a gover- nance framework and funding are the key enablers that will enable the company to shift from being a minority player in the market to the “leading energy company in Africa”.

Outlining the group’s ambitions and stra-tegies to 2020 for the media, she confirmed recently that discussions were under way for PetroSA to enter the downstream market through acquisitions.

While due diligence on the undisclosed tar- geted firms had not yet started, Nokwe-Macamo hoped the deal could be concluded “sooner rather than later”, as the acquisition of one of South Africa’s downstream entities was essential.

She, however, dismissed recent reports claim- ing that PetroSA was in advanced negotiations to buy out Petronas’ 80% stake in Engen, stating that all the parties involved were under strict confidentiality agreements and that revealing the companies involved would be counterproductive and detrimental to the discussions.

PetroSA would also import liquefied natural gas (LNG), which would “top up” the pro-duction at its gas-to-liquid plant, in Mossel Bay, and ensure security of supply beyond 2020. Public consultations for this initiative, which also provided an alternative source of income, started early this year.

The national oil company’s offshore drilling project, off the south coast of South Africa, Project Ikhwezi, is one of the more pressing “stay in business” strategies. The project, comprising the drilling of five wells, could bring production up to 60% and supply sufficient feedstock until the group augmented its feedstock with LNG.

PetroSA would fund its aggressive capital expansion programmes – the collective total value of which has not yet been determined – through various instruments, including commercial and noncommercial lending, assistance from shareholders through recapital- isation or guarantees for any acquisitions or projects, equity and a variety of other options.