PetroSA'S RESPONSE TO CORRUPTION ALLEGATIONS CARRIED IN THE MAIL & GUARDIAN

Cape Town, 26 April 2013 - Given the high level of media interest following the publication of corruption allegations in today's Mail & Guardian (see here), PetroSA hereby makes available the following comprehensive statement:

Background

The past two years have been among the busiest to date for PetroSA. During that period PetroSA made a critical acquisition of a company involved in a strategic partnership in a producing oil field in Ghana, thus gaining access to hydrocarbon-rich West Africa, and it has also intensified efforts to enter the downstream market in South Africa. Both activities have been in pursuit of PetroSA's strategy to be a significant player in the liquid fuels sector in the country, accounting for a 25% market share by 2020. Such a market share will enable PetroSA, as South Africa's National Oil Company, to be more effective in discharging its duty of ensuring security of liquid fuels supply in the country.

Acquisition of Sabre Oil and Gas Holdings Limited, which has a shareholding in the producing Jubilee field in Ghana, has given PetroSA access to an alternative source of revenue, while acquisition of depots in Bloemfontein and Tzaneen has laid a solid foundation for the company's downstream entry. In both endeavours PetroSA has been competing for these opportunities against many established players, most of which are in the private sector and are unencumbered by some of the regulatory provisions with which PetroSA as a State-owned company has to comply.

In making transactions of the type that PetroSA has been involved in, swift decision making and quick turn-around times are critical and can sometimes mean a difference between closing a deal and losing out on an important opportunity. Therefore, in the process of increasing PetroSA's chances of successfully closing these deals, unfortunately some deviations from our normal procurement processes have occurred. These were duly declared in the annual financial report of last year.

The Board has also commissioned a review of audits on these matters and will report its findings and conclusions to the Shareholder. To the extent that any impropriety has taken place, the Board and, where applicable, the Shareholder will take appropriate action. The PetroSA Board has tasked the executive management team to ensure that lessons are learned and that no repeats of these lapses occur.

PetroSA's response to the specific allegations in the Mail & Guardian are as follows:

Sabre Oil Acquistion

The negotiating team's mandate from the PetroSA Board was to negotiate up to a maximum of USD 640 million for the acquisition of Sabre Oil and Gas Holdings Limited, subject to the finalization of a Share Purchase Agreement (SPA) and approvals by all relevant authorities. These authorities were PetroSA's holding company CEF, the Minister of Energy, the National Treasury, the Reserve Bank, the Ghana National Petroleum Company (GNPC) and Ghana's Minister of Energy. All these approvals were subsequently obtained and PetroSA managed all the conditions precedent subject to Board approvals.

It is important to note that the final purchase price was less that the amount approved by the Board for the transaction.

The project team reported to Mr Everton September, the Vice President for New Ventures: Upstream, and he was responsible for ensuring that the project team executed the Board-approved mandate for the acquisition.

The management and shareholders of Sabre Oil and Gas Holdings never formally accepted the PetroSA team's initial offer of US$480 million plus contingencies. Instead, Sabre insisted on USD500 million for the following reasons:

The PetroSA price during the acquisition process dropped from US$640 million to US$480 million plus contingencies;

There was concern that a price below the market value of Sabre would result in one of the Joint Venture partners pre-empting the PetroSA offer, something to which they were entitled in terms of the partnership agreement, in an effort to preserve their shareholder value.

Having considered Sabre's demand and the reasons behind the demand, PetroSA's then Acting CEO agreed to US$500 million plus contingencies, which was well within the Board-approved transaction price. The final agreement was a series of compromises by both parties, as typically happens in such transactions. The final negotiated deal was favourable to PetroSA.

The value of any negotiated terms is best tested in the open market. PetroSA's deal was initially pre-empted by one of the existing partners in the Jubilee Joint Venture, thus signalling that our offer was competitive.

With respect to the retention amount, this was to provide for any eventuality that PetroSA might encounter during the company take over. The retention amount was included in the purchase price.

Regarding tax liability, PetroSA has mitigated all potential tax risks. There is currently no tax exposure related to the acquisition. In terms of the SPA between PetroSA and Sabre Oil and Gas Holdings, the seller has taken all responsibility for all tax-related expenses and transactions costs prior to the effective date of the acquisition.

The negotiations led to a deal favourable to PetroSA and South Africa, and the Sabre deal has presented an opportunity for the country potentially to grow its business presence in different sectors of the economy in West Africa, but especially in the oil and gas sector.

Downstream Acquisition

An aspect of PetroSA's corporate strategy is an entry into the downstream market. To deliver on this part of its strategy, the company has been exploring opportunities for downstream entry since 2007. PetroSA has pursued both organic and acquisitive downstream entry opportunities, and the company's purchase of depots in Tzaneen and Bloemfontein in 2012 has been part of the implementation of that strategy.

In May 2011 the PetroSA Board mandated the executive management team, in a change in strategy, to engage with various industry players in order to explore opportunities to acquire a majority shareholding in their assets. These negotiations are on-going.

Core elements of deliverables for the advisor were the identification of funding options to support the project and selection of a company to purchase or invest in. Harith was appointed as a financial and transaction advisor for downstream entry. Since this matter was part of the investigation by the Board and CEF, PetroSA's holding company, as soon as the due process of the investigation is completed all appropriate corrective action will be taken and an announcement made.

Statement issued by Kaizer Nyatsumba, PetroSA, Head: Corporate Affairs and Shared Services, April 26 2013

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