South African state oil company PetroSA's profit halves

JOHANNESBURG (Reuters) - South African national oil company PetroSA said on Thursday it planned to increase its debt as part of a capital expansion programme to revive its fortunes.

PetroSA, which operates the third largest gas-to-liquids refinery in the world, said net profit for the 12 months to the end of March fell 50 percent to 593 million rand from 1.2 billion the year before.

"An aggressive capital expansion program, which includes the Project Ikhwezi offshore development project and the envisaged acquisition of a downstream operation, will significantly change this scenario," said Webster Fanadzo, PetroSA's acting chief financial officer.

Project Ikhwezi is a $1 billion development off South Africa's south coast and is scheduled to come into production in the second quarter of 2014, with the gas providing supplies to PetroSA's Mossel Bay gas-to-liquids refinery, its primary revenue earner.

Mossel Bay has been operating at half of its capacity of 42,000 barrels per day due to a shortage of gas as offshore fields run dry.

Ikhwezi is seen lasting till 2018 when liquid natural gas will be imported to Mossel Bay to sustain the refinery to 2020.

PetroSA was planning to spend between $375 million and $510 million building the infrastructure needed to import the gas.

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