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...