Draft law proposed to give state a share in petroleum

The Department of Mineral Resources and Energy is considering legislation that will give government a 20% free carry share in upstream petroleum, Parliament heard on Friday.

This is as the development of petroleum resources is being regulated under the Mineral and Petroleum Resources Development Act, which lapsed and created the opportunity for separate petroleum provisions.

The proposed legislation - which is yet to be presented before Cabinet or Parliament - seeks to give effect to state custodianship of the country’s petroleum resources, and to regulate upstream petroleum resources industries.

Speaking to the committee of mineral resources and energy, deputy director general of mineral policy and promotions Ntokozo Ngcwabe said a lack of petroleum upstream regulation had hampered development, and that the department was working on entrenching security of tenure in petroleum.

Ngcwabe said empowerment provisions in the draft legislation would make provision for 10% broad-based black economic empowerment participation at a project exploration and production stage.

"The minister will be empowered to reserve a block or blocks for 100% black-owned companies with relaxed requirements. The bill will also empower the minister to develop a Petroleum Resources Charter to pursue the transformation agenda," said Ngcwabe.

Ngcwabe said the bill proposed 20% carried state participation be applied to exploration and production rights in petroleum, with provisions for the state to be represented on boards of operations where it participated.

"Provision is made for cost recovery from the exploitation of the resources. Different models are being considered and the state interest will be held by a state-owned company," Ngcwabe said.

She said the while Cabinet was still to be fully briefed on the legislative proposals, the department was working with National Treasury to determine guidelines in various aspects of the provisions.

Members of the committee welcomed the submission but urged the department to have a draft bill ready so that Parliament could properly engage the proposals.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
17.77
-1.2%
Rand - Pound
21.44
-1.3%
Rand - Euro
19.03
-1.0%
Rand - Aus dollar
12.30
-0.7%
Rand - Yen
0.14
-0.9%
Platinum
972.00
-1.5%
Palladium
1,643.39
-0.6%
Gold
1,874.34
+0.0%
Silver
22.27
+0.4%
Brent Crude
83.69
+3.2%
Top 40
73,968
+0.7%
All Share
79,976
+0.6%
Resource 10
74,722
+0.2%
Industrial 25
103,851
+1.2%
Financial 15
16,339
+0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders