Scenario 4

Green Connection's

Sell, sell! Buy, bye!

October 2015

Set-up

You're not the only one with big decisions to make in the energy cluster. The acting CEO of PetroSA’s sister company, the Strategic Fuel Fund (SFF), has written to the Minister of Energy requesting permission to “rotate” some of its strategic oil reserves[17][18]. That means selling off some of the oil reserves and then replenishing them. The Minister agrees to the request, with certain provisions regarding regular reporting of progress, a transparent process for sale and purchase of stock, and that stock levels are maintained.

The dilemma

Should the SFF...

Your options

• Adhere to the Minister’s requests, carefully rotating the strategic reserve and ensuring accountability by involving the board and ministry at every step.
• Mostly comply with the request, but leave a bit of a gap between selling off some oil and replacing it. After all, who will notice a few barrels gone missing for a few days?
• Comply with the Minister’s requests and sell off and replace 10.5 million barrels of oil, but accidentally forget to inform the board that you are undertaking such a major endeavour.
• Sell off 10.3 million barrels of oil at around a third less than market value. Keep it quiet, though, and no-one will know.