Page 8 - AfrOil Week 01 2020

AfrOil POLICY AfrOil
South Africa unveils draft version of petroleum law
SOUTH AFRICA
SOUTH Africa’s Department of Mineral Resources and Energy recently unveiled a proposed oil and gas law that would reserve a minority stake in exploration and development projects for the government.
In late December, the ministry said it had secured approval from the cabinet for the pub- lication of the Upstream Petroleum Resources Development Bill in the Government Gazette. The draft version of the law stipulates that the South African government will be entitled to a 20% carried stake in new hydrocarbon deals. It also provides for at least 10% of equity in each project to be reserved for black-owned companies.
The state’s carried interest “shall not be recoverable at exploration and appraisal stage,” the bill says. It also states: “The holder of a pro- duction right shall recover development and production costs from the proceeds generated from production operations as prescribed.”
The draft law also calls for the government to establish a special body known as the Petro- leum Agency to oversee the oil and gas indus- try. Additionally, it establishes a demarcation between legislation that governs the mining industry and legislation that governs the hydro- carbon sector.
The Ministry of Mineral Resources and Energy did not say how long it might take to secure Parliament’s approval for the oil and gas law. It did note, though, that interested parties would be able to submit comments on the draft until February 21.
“The publishing of the bill is a critical step in the regulatory process and provides an oppor- tunity for the investment community, as well as
all interested and affected parties, to share their inputs on the proposals by government,” the ministry said in a statement dated December 24.
It also expressed optimism about the poten- tial of the oil and gas industry to benefit the country, saying: “The proposed bill aims to strike a balance between the need to attract investment into this key sector of the economy, and ensuring the potential of the upstream petroleum industry benefits all South Africans.”
In past years, South Africa has had some dif- ficulty attracting partners for hydrocarbon pro- jects, with some potential investors identifying legislative uncertainty as the reason for their reluctance to proceed. Since Total’s discovery of crude oil and gas condensate at the offshore Brulpadda field in February 2019, though, the government has been trying to speed up the process of setting up a legal framework for the i n d u s t r y. ™
The Brulpadda discovery has heightened the need for an oil law (Image: Total)
Somalia’s upper house passes Petroleum Law in third reading
SOMALIA
THE Federal Republic of Somalia has taken a step towards the introduction of a new law that will govern the oil and gas industry.
On January 6, the country’s Ministry of Petroleum and Mineral Resources reported that the upper house of the parliament had approved
the current draft of the Petroleum Law in its third reading.
“The upper house saw 28 senators vote to approve the Petroleum Law, which follows its approval in the lower house on May 20, 2019,”
the ministry said in a statement. 
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w w w. N E W S B A S E . c o m Week 01 08•January•2020