American oil and gas exploration and development company Anadarko, which confirmed a halt to its exploration spending in South Africa as a result of legislative uncertainties, says it will work with the South African government to gain clarity on its new petroleum legislation.
During the last sitting of South Africa’s fourth democratic Parliament, lawmakers approved amendments to the Mineral and Petroleum Resources Development Act (MPRDA), including a clause entitling the State to a 20% free carry in oil and gas exploration and production rights.
The Bill was passed in the National Assembly with 226 votes in favour and 66 against. However, President Jacob Zuma has not yet signed the Bill into law and the Democratic Alliance, in particular, has been vocal in its warning that he should refrain from doing so. The opposition party says the legislation could negatively affect foreign investment and could have “devastating” consequences for the country's nascent gas industry.
In late April, Anadaroko East Africa exploration manager Tom Fletcher told delegates to an energy conference in Nairobi, Kenya, that the group had suspended expenditure in South Africa “until the petroleum law and fiscal terms are more clear”.
The company has been exploring blocks 5, 6 and 7 offshore Cape Town, in the Western Cape, in partnership with national oil company PetroSA.
Anadarko external communications director John Christiansen tells Engineering News Online that the group has already completed work commitments for the current exploration phase, including a "two-dimensional seismic acquisition and multi-beam bathymetry surveys of the seabed”.
“We are utilising this time to incorporate the new data into our geologic model, monitor the political process and work with the South African government to gain clarity on the new petroleum laws,” Christiansen reports, while refusing to be drawn on the specifics of the company's engagement with government.
Speaking during a pre-election event, the African National Congress's Enoch Godongwana demonstrated a strong willingness from the side of the ruling party, which is expected to win the May 7 election, to re-engage with the oil and gas industry on the MPRDA. However, he also did not offer specifics.