President Jacob Zuma says the finalisation of the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill, which is currently in the Parliamentary process, will assist the country to accelerate offshore oil and gas exploration.
Delivering an update in Pretoria on government’s Operation Phakisa, Zuma said there was still an aspiration, under the Oceans Economy Phakisa, to stimulate the development of 30 offshore exploration wells in ten years.
“If this is achieved, it would mean the creation of up to 130 000 jobs, with an annual contribution to gross domestic product of $2.2-billion, while reducing the dependence on oil and gas imports during the production phase.”
However, uncertainty surrounding the legislative environment was perceived as a major impediment to such investment, with the oil and gas sector having raised major reservations when the MPRDA amendments were first released.
The draft changes stipulated a 20% free-carry for the State in oil and gas projects, but also indicated that, in certain instances, government might take even higher positions.
The industry had also expressed concern about the Ministerial discretion to declare a mineral “strategic” and about a proposal that the Department of Mineral Resources assumed control of the licensing of oil and gas acreages from the Petroleum Agency of South Africa.
At one stage, it was even suggested that the oil and gas aspects of the MPRDA should be separated from the legislation, which was said to be more attuned to South Africa’s mature mining sector.
There had since been significant consultations on the amendments and industry observers were expecting material changes ahead of eventual implementation. However, few were currently expecting separate legislation for oil and gas.
In an address at the Sefako Makgatho Presidential Guest House, Zuma stressed that work was continuing under the offshore oil and gas work stream of Operation Phakisa to explore further opportunities.
“Some projects have already commenced. A total of R9.2-billion is to be spent to develop Saldanha Bay as an oil and gas hub,” the President said, adding that the phased gas pipeline routes had also been defined.
“In addition, environmental authorisation has been approved for the Burgan fuel storage facility in the port of Cape Town. This is an investment of approximately R660-million rand and construction will commence by the end of August 2015.”
Updates were also provided for the other Oceans Economy work streams dealing with marine transport and manufacturing, aquaculture, and marine protection services and ocean governance.
A roadmap had been developed for the proclamation of new harbours in the Northern Cape, Eastern Cape and KwaZulu-Natal and a Small Harbours Development Authority would be established to support the rehabilitation, upgrade and development of such facilities.
“We have identified Gansbaai, Saldanha Bay, Struisbaai, Gordons Bay and Lamberts Bay for rehabilitation and development,” he said.
Initiatives were under way to boost South Africa’s aquaculture sector, from a R700-million-a-year industry currently to a R3-billion industry by 2019.
The Department of Public Works had awarded the first five leases for aquaculture initiatives in Saldanha Bay and Hondeklipbaai and Zuma said additional long-term leases would be awarded in the coming months.