adminSasol, which is exploring for oil and gas off the Durban coast in partnership with Italy’s Eni, has halted spending on the project until there is certainty on the minerals amendment bill.The Mineral and Petroleum Resources Amendment Bill, which was rushed through parliament in March ahead of the elections, contains various problematic clauses for the oil and gas industry.
These include a provision that will see the government get a 20 percent free stake in all projects and the right to acquire the rest at a so-called “agreed” price. Oil and gas may also be declared strategic resources, which could lead to price and export controls. This week Sasol publicly added its support to Anadarko Petroleum, which said in April it would halt exploration spending in South Africa until there was regulatory certainty.
Sasol wants to see the finalised law and regulations, and have certainty on whether oil and gas will be split from the mining bill. “We cannot move forward with any type of exploration in South Africa until those details and that certainty are nailed down for us,” said CEO David Constable. Sasol has completed seismic surveys, an important step in the exploration process to help map underground rock formations and identify potential areas where hydrocarbons may be found.
Sasol is “quite positive” that its exploration off the Durban coast will be successful. “We brought in Eni from Italy, which happens to be a very successful upstream oil and gas player,” he said. “They’ve been number one in the past few years in exploring and finding resources, and we’re excited that they’ve chosen to come into the offshore Durban basin with us.” Manus Booysen, a partner at Webber Wentzel, said there had been no clear indication from the minister as to when the bill would come into effect.- Timeslive.
derick.khumalo