Draft bill for SA oil and gas industry sent to Parliament

Cabinet has approved the submission of the Draft Upstream Petroleum Resources Development Bill to Parliament. Following Cabinet approval, the Draft Upstream Petroleum Resources Development Bill will now be submitted to Parliament. The proposed legislation will afford government – via state-owned PetroSA – the right to a 20% stake […]


Cabinet has approved the submission of the Draft Upstream Petroleum Resources Development Bill to Parliament.

Following Cabinet approval, the Draft Upstream Petroleum Resources Development Bill will now be submitted to Parliament.

The proposed legislation will afford government – via state-owned PetroSA – the right to a 20% stake in all oil and gas exploration and production projects in South Africa.

The law will provide separates rules for the petroleum (oil and gas) and mining sector. 

The bill, which was first published in December 2019, details the application system for permits, the issuing and transfer of rights. 

In a statement following a meeting last week, Cabinet stated that the bill “create[d] a conducive environment for investment, growth and job creation in the upstream of petroleum resources market” as well as strategic stock requirements for petroleum rights holders to sell a percentage of petroleum at prevailing market price to the state petroleum company. 

The submission to Parliament follows government’s consultations on the industry submissions and proposed amendments to the bill, in a process aimed to addressing stakeholders concerns. The parliamentary submission now allows for further debate about the bill.

The 2019 bill states that every exploration and production right must have a minimum of 10% participating interest held by black persons. The bill also empowers the minister of mineral resource and energy to reserve certain exploration or production areas for 100% black-owned companies.

It also allows the minister to direct production right holders to sell a certain volume of South African produced oil and gas to the state to provide for the country’s strategic stock.

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