The Cabinet has approved the submission of an upstream oil resource development bill to Congress.
Following Cabinet approval, a draft upstream oil resource development bill will be submitted to Parliament.
The proposed bill gives the government the right to acquire a 20% stake in all South African oil and gas exploration and production projects through state-owned PetroSA.
The law provides separate rules for the oil (oil and gas) and mining sectors.
The bill, first issued in December 2019, details the permit application system, the issuance and transfer of rights.
In a statement following last week’s meeting, the Cabinet said the bill was “[d] A fostering environment for investment, growth and job creation upstream of the oil resource market ”, and strategic equity requirements for oil owners to sell a certain percentage of oil to state-owned oil companies at prevailing market prices.
Parliamentary submission is a process aimed at addressing stakeholder concerns, following industry submissions and government consultations on bill amendments. Parliamentary submissions have allowed further discussion of the bill.
The 2019 bill stipulates that all exploration and production rights require a minimum of 10% black participation. The bill also empowers the Minister of Mineral Resources and Energy to secure specific exploration or production areas for 100% black-owned businesses.
The minister can also instruct production rights holders to sell a certain amount of oil and gas produced in South Africa to the state to provide the country’s strategic inventory.
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SA oil and gas industry bill sent to Congress
Source link SA oil and gas industry bill sent to Congress