- President Cyril Ramaphosa has signed the Upstream Petroleum Resources Development Bill (Upstream Bill) into law.
- The new Bill is aimed at accelerating petroleum exploration and development with participation by black South Africans, as part of the nation’s social and economic advancement.
The Presidency said in a statement that the Bill ensures petroleum resources are developed responsibly, provides fair access, and promotes sustainable growth. It also allows for active involvement from government and black South Africans in building up the country’s petroleum sector.
“The legislation acknowledges that South Africa’s petroleum resources belong to the nation and that the state is the custodian of these non-renewable natural resources which must contribute to South Africa’s social and economic development,” The Presidency said.
The Upstream Bill seeks to ensure that the upstream petroleum sector is regulated outside of the Mineral and Petroleum Resources Development Act, 2002 (MPRDA) under standalone legislation. Both the MPRDA the Upstream Bill will still be administered by the Ministry of Mineral Resources and Petroleum under Gwede Mantashe.
The new Bill introduces a separation of the regulatory frameworks governing mining and upstream petroleum exploration and production which are currently dealt with together under the MPRDA. This separation allows the entire upstream oil and gas sector to be regulated entirely separately from the more established mining sector. The new regulatory framework is designed to secure greater investor confidence in the sector through regulatory certainty.
The new law sets out the functions of the South African Agency for Promotion of Petroleum Exploration and Exploitation, which include receiving and evaluating applications for reconnaissance permits (geological, geophysical and photo geological surveys), petroleum rights and retention permits, and making recommendations to the Minister of Mineral Resources and Energy.
As part of advancing industrialisation and manufacturing diversity, the law also provides for local content as a development strategy to enable skills development, local recruitment and national participation through supply of goods and services.
Author: Bryan Groenendaal
