The law has been anticipated for years as Shell Plc and other companies delayed activity or withdrew completely from South African acreage, citing regulatory uncertainty. Image: Bloomberg

SA oil group seeks to amend new law to woo investors

‘SAOGA will continue to lobby for a more investor-friendly legislative and regulatory environment.’

by · Moneyweb

Some oil explorers are “not satisfied” with South Africa’s long-awaited rules for the industry that were signed into law last month by President Cyril Ramaphosa, according to a lobby group.

The Upstream Petroleum Resources Development Act published on 29 October includes regulations for the ownership of oil and gas blocks and their development. The law has been anticipated for years as Shell Plc and other companies delayed activity or withdrew completely from South African acreage, citing regulatory uncertainty.

Read: Shell’s exit from SA ‘not a loss but an opportunity’

ADVERTISEMENT CONTINUE READING BELOW

“It is great that we are moving toward legislative certainty as a country,” though neighbouring countries “have done much better,” Adrian Strydom, executive director of the South African Oil & Gas Alliance, said in response to questions. “Some of the SAOGA member companies are not satisfied with the terms of the legislation,” he said, without giving details.

Oil majors have been developing gas projects in Mozambique and recent crude discoveries in Namibia sparked a surge of activity in the waters north of South Africa’s maritime border. Over the last few years companies have also encountered legal battles with environmental groups that have successfully blocked exploration.

“SAOGA will continue to lobby for a more investor-friendly legislative and regulatory environment,” Strydom said. “We may well require an amendment to the law to create greater clarity, improve ease of doing business, and to increase investor attractiveness.”

The Department of Mineral Resources and Energy didn’t immediately respond to an email seeking comment.

South Africa has virtually no commercial oil production and relies on imports and synthetic products to meet its fuel needs. The most industrialised nation on the continent also plans to build terminals for liquefied natural gas imports.

© 2024 Bloomberg

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.