South Africa to Split Oil, Gas Laws from Mining

Sunday, 15th May 2016
South Africa to Split Oil, Gas Laws from Mining

South Africa is planning a new law that will separate parts of its oil and gas rules from legislation governing the mining industry, Energy Minister, Tina Joemat-Pettersson, said according to Bloomberg. The plan involves separating from the mineral regulatory framework those elements that relate to the petroleum value chain.

Exploration and gas concessions will fall under the Upstream Gas Bill, “which will be derived from” the process of separating out the current Mineral and Petroleum Resources Development Act (MPRDA), she said. A separate Gas Amendment Bill “will encompass the midstream elements of the gas value chain.”

As Gulf News wrote, oil and gas companies operating in South Africa have been left in limbo as legislators have stalled the MPRDA that proposed giving the state a 2% free stake in all new energy ventures and enabling it to buy an unspecified additional share.

While Parliament approved the bill in 2014, President Jacob Zuma declined to sign it because he said it may violate the constitution. The bill was referred back to the legislature in January 2015. Exxon Mobil and Total are among those that objected to law on the grounds it’s too vague and will undermine their businesses.

While South Africa had proven reserves of 1m barrels of oil at the end of 2013, there is no significant production. About 70% of the nation’s crude needs are met through imports with the balance processed from coal and gas.

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