Speaking notes by the Minister of mineral and petroleum resources at the Southern Africa oil and gas conference
Programme Director,
Deputy Minister of Mineral and Petroleum Resources, Ms Phumzile Mgcina
Chairperson of the National House of Traditional and Khoisan Leaders
Members of the Portfolio Committee on Mineral and Petroleum Resources, led by the Chairperson, Honourable Mika Mahlaule
MECs and representatives of various provinces that are here
Chairperson of the Petroleum Agency, Mr Satish Roopa and your board members
Chairperson and Executives of the Southern Africa Oil and Gas Alliance
CEO of Petroleum Agency SA, Dr Bongani Sayidini
Executive Chairman of the Africa Energy Chamber, Mr NJ Ayuk
Representatives of our State-Owned Entities
Captains of Industry
Distinguished Guests
This year’s edition of the Southern Africa Oil and Gas Conference takes place at the time of heightened geopolitical tensions that continue to create uncertainty and volatility in the global oil markets.
Since the onset of the conflict in the Middle East, fuel supply chains have experienced disruptions, while the under-recovery on fuel prices has continued to fluctuate.
While questions remain about potential fuel supply disruptions, the reality is that substantial fuel price increases are increasingly unavoidable. Countries that rely heavily on imports of refined petroleum products remain particularly vulnerable to global market shocks.
To maintain product availability in our country, as communicated last week, the Department remains in constant engagement with industry players to explore all possible supply sources. These engagements are aimed at ensuring uninterrupted fuel availability in the domestic market, without immediately utilising the country’s strategic reserves.
However, as we emphasised during the Africa Gas Forum, the sustainable long-term solution to our challenges lies in domestic production. This can only be achieved through the rigorous exploration and responsible exploitation of our own petroleum resources.
As you are aware, one of the biggest challenges facing the development of our petroleum sector remains the persistent opposition from environmental lobby groups who continue to block every oil and gas development initiative in our country.
It is now well established that South Africa is endowed with significant offshore petroleum potential, including major gas discoveries in the Outeniqua Basin.
The Orange Basin has also emerged as a world-class frontier following significant oil discoveries in Namibia, which geological evidence suggests may extend southwards into South African waters.
Regrettably, we have not yet been able to fully explore and exploit this potential due to ongoing blockages against oil and gas development in the name of environmental protection.
Our Constitution – the supreme law of the country - explicitly states that we must secure ecologically sustainable development and the use of natural resources while promoting justifiable economic and social development.
The truth is that rising oil and gas prices have a direct ripple effect on the cost of living. The lack of access to these resources has an even greater impact, as it can lead to energy poverty, rising unemployment, and the further entrenchment of poverty and inequality.
South Africa, and indeed the African continent at large, cannot afford to remain poor while endowed with abundant natural resources. We must harness these resources responsibly to drive inclusive economic growth, create employment opportunities, and eradicate poverty.
The importance of responsible oil and gas development in meeting our socioeconomic needs cannot be overstated. Therefore, increasing our petroleum refining capacity within our borders, beyond the NATREF, Astron Energy refinery, and Sasol Secunda coal-to-liquids plant, would significantly enhance our industrialisation efforts and contribute to GDP growth.
It is against this backdrop that our government continues reform its legislative framework to promote and advance the petroleum sector so that it can make a meaningful contribution to South Africa’s economy.
The enactment of the Upstream Petroleum Resources Development Act (UPRDA) represents a critical intervention in this regard. The Act has not only separated petroleum from mining legislation, but also establishes an enabling regulatory framework aimed at accelerating exploration and production of the nation’s petroleum resources.
Although we had initially committed to publishing the regulations to operationalise the Act in September last year, extensive submissions from industry stakeholders required further consideration. I can report to you that these submissions have now been considered, and the relevant officials are now dotting the i’s and crossing the t’s ahead of publishing the regulations for implementation by the end of this month.
We are also advancing the modernisation of the Petroleum Products Act. Following public consultations on the draft Petroleum Products Bill (PPB), the bill is currently undergoing certification processes ahead of submission to Cabinet for approval, and thereafter to Parliament.
These reforms are aimed at ensuring equitable access to, and sustainable development of, the nation’s petroleum resources while, in the long term, reducing the country’s reliance on imports of finished products to meet domestic demand.
As indicated during last year’s conference, the South African National Petroleum Company (SANPC) is now established. This entity will serve as the country’s champion in the petroleum sector and will facilitate meaningful state participation in the development of South Africa’s petroleum resources.
Distinguished guests, for years, a moratorium on shale gas development has remained in place while necessary environmental regulations were being developed. Although we had hoped that this moratorium would be lifted by 2025, a number of factors delayed this progress.
However, I am pleased to report that last week we held a constructive engagement with the Ministers responsible for Environmental Affairs and Water and Sanitation to chart a way forward. Following extensive discussions, the Ministers undertook to finalise and gazette the required regulations in the next few months. As per our previous commitment, the Department stands ready to lift the moratorium immediately after these regulations are promulgated.
At the same time, we welcome the undertaking by the Minister of Environmental Affairs to “proceed with the determination of appeals lodged against several environmental authorisations granted for offshore oil and gas exploration projects”.
This commitment represents an important step towards promoting fairness and regulatory certainty in the development of our oil and gas sector and ensures that these matters do not remain indefinitely suspended in lengthy litigation processes that create investor uncertainty.
As the Department, we remain firmly committed to ensuring that South Africa’s petroleum resources are developed in an orderly, responsible, and environmentally sustainable manner, while at the same time advancing meaningful social and economic development for our people.
South Africa must not stand on the sidelines while the global energy landscape evolves and while our neighbouring countries unlock the value of their resources.
We must act decisively, responsibly, and in the national interest to unlock the full potential of our petroleum sector. I thank you.
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