Africa: South Africa's Upstream Petroleum Bill Proposes New SOE, 20 Percent State Stake and BEE Rules


The Upstream Petroleum Resources Development Bill calls for the state to take a 20% stake in exploration and production ventures, and proposes the creation of a new state-owned enterprise (SOE), the State Petroleum Company. Given South Africa's track record on SOEs, what could go wrong?

The Upstream Petroleum Resources Development Bill was approved last week by Cabinet and it is not clear when it will be tabled in Parliament. It comes in the wake of gas finds off South Africa by France's Total and against the backdrop of a rise in risk aversion among big oil and gas producers faced with a global drive towards renewable energy sources, last year's price collapse and violent flare-ups such as the jihadist attacks in northern Mozambique.

"The state has a right to a 20% carried interest in petroleum rights, including in both the exploration and production phase," says the bill. This was not unexpected.

It adds that, "The State may elect to take its proportionate share of petroleum production in kind or in cash." So, cash or gas.

The bill also has a BEE component, but one that seems to draw on the lessons learned from the thorny "once empowered, always empowered" issue...

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 900 reports a day from more than 130 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.