A roadblock to investment in South Africa’s oil and gas sector could potentially be cleared as controversial natural resources legislation is now being reviewed.
South Africa’s President Jacob Zuma on Friday sent the country’s new Mineral and Petroleum Resources Development Act back to the National Assembly for more work.
Zuma was of the view that the new laws “would not pass constitutional muster” in the current form.
The main thrust of the act is to set out new regulations for the mining industry, but it is also being applied to petroleum interests.
This has been something of a road-block to new investment into oil and gas ventures in South Africa, and as such the referral is seen as potentially good news.
The proposed new laws would, among other things, give the state a right to a free 20% stake in new oil and gas projects.
Late last year there were calls for oil and gas companies to be treated separately from the mining sector.
Firms such as ExxonMobil and Total are said to be among the critics of the proposed legislation.
Ngoako Ramatlhodi, the Mineral Resources minister, in October said he was personally convinced that there should be a separate legal framework for oil and gas companies.
The basin as a whole is currently estimated to contain up to 500tn cubic feet of potentially recoverable gas in shale.
A moratorium on shale exploration has been in place in South Africa, though it is understood the authorities have been moving towards an opening up of the nascent opportunity.