(Bloomberg) -- South Africa is working on a policy to govern the development of oil and gas resources after calls by potential investors to shield the industry from a long-running debate over laws that apply to mining exploration.
The finalizing of oil legislation has become more urgent since Total SA announced the first significant deep-water oil find off the coast of South Africa in February. Since the discovery, which has an estimated 1 billion barrels of crude reserves, rival Royal Dutch Shell Plc has bought a stake in exploration blocks in the same area from Anadarko Petroleum Corp.
“We need to speedily work to entrench regulatory and policy certainty,” Energy Minister Gwede Mantashe said in a speech to parliament in Cape Town on Tuesday. “The department has begun with the process of developing a Petroleum Resources Development Bill.”
Developing a separate oil and gas policy will protect the industry from uncertainty that’s held back the mining sector, which has been bogged down in debates over a new government charter aimed at redistributing the country’s mineral wealth.
South Africa currently imports about 60% of its oil-product needs in the form of crude, which is processed at local refineries. The rest is met by plants owned by Sasol Ltd., which converts oil and gas into motor-fuel products and chemicals.
The bill “will further provide regulatory certainty to the upstream petroleum industry and stimulate growth and development of this sector,” Mantashe said, without giving details of when he expects the draft law to come before parliament.
It comes as President Cyril Ramaphosa seeks to lure $100 billion of investments by 2023 to revive a struggling economy. The country’s energy supply is largely based on coal, while state power utility Eskom Holdings SOC Ltd. also runs turbines on costly diesel fuel.
--With assistance from Paul Burkhardt.
