Energy bill: Is there more than meets the eye?

2015-01-25 17:00

Too much ministerial power and too little consultation were among the top reasons for President Jacob Zuma sending the Mineral and Petroleum Resources Development Amendment Bill back to Parliament.

President Zuma’s spokesperson, Mac Maharaj, said the bill, which was sent back to Parliament last week after months of awaiting Zuma’s consent, would not pass constitutional muster because:

1.?It elevated certain industry codes and charters, including the codes of good practice for the South African minerals industry, to the rank of national legislation and also gave the minister powers to amend or repeal them without following procedures set out in the Constitution;

2.?It contained sections that would allow the minister to declare minerals and petroleum resources “strategic”, and this was inconsistent with trade agreements;

3.?The national council of provinces and provincial legislatures did not allow enough time for public participation; and

4.?The bill was not referred to the house of traditional leaders for comment.

An exploration company that stands to suffer losses if at least one aspect of the bill isn’t changed is Silver Wave Energy, whose oil exploration concessions almost rival state-owned PetroSA.

The Petroleum Agency SA’s activities map, dated October 2014, shows that Silver Wave has three exploration rights and five technical cooperation permits stretching from Mozambican waters to Saldanha Bay in the Western Cape.

Drilling a single exploration well costs up to $250?million (R2.8?billion) and development about $5 billion, but oil production promises to be lucrative once drillers strike pay dirt.

They could bring in revenues of about $1 billion or more each year, according to figures published by Oceans Economy Lab, under the offshore oil and gas sector, which has been set up as part of government’s operation Phakisa project.

The version Zuma sent back to Parliament grants government a 20% free stake in new oil and gas ventures.

This means Silver Wave stands to incur substantial losses from its eight concessions because it would have to cede profits to government.

Diplomatic information published on WikiLeaks shows that Silver Wave, though registered in Singapore, has close ties to the Burmese regime.

In one document, motivating for his addition to the US’s targeted sanctions list dated May 2009, Silver Wave group chairman Minn Minn Oung is said to have admitted that he received government contracts for onshore and offshore oil and gas development because of his close personal ties to Burma’s minister of energy.

Before Silver Wave bagged its first South African concessions, Burma’s ambassador to South Africa, Oo Lwin, provided top officials with gifts.

Zuma received African gems and art in October 2009, according to declarations of his interests for the 10 months to February 2010 filed with the cabinet secretary. This was followed by a 2010 calendar and various sculptures the following month. No monetary values were provided in the declaration.

The parliamentary register of members’ interests shows deputy president Kgalema Motlanthe received a special 2010 calendar, while international relations and cooperation deputy minister Susan van der Merwe was given gems, picture and art frames valued at around R300.

Later registers do not show further gifts from Lwin.

Neither Oung nor Silver Wave business development director Lee-Kong Lin responded to questions sent by City Press.

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