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Oil and gas sector needs its own legislation - Zwane

Oct 19 2017 10:53
Liesl Peyper
Minister of Mineral Resources Mosebenzi Zwane spea

Minister of Mineral Resources Mosebenzi Zwane speaks in Cape Town on the first day of the Mining Indaba 2017 Conference, the world's foremost conference on mining in Africa. (Rodger Bosch, AFP)

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Cape Town – Mineral Resources Minister Mosebenzi Zwane on Thursday confirmed that the oil and gas industry in South Africa will in future be governed by its own legislation, separate from current mining laws and regulations.

Delivering the keynote address at an upstream oil and gas transformation colloquium hosted at PetroSA’s head office in Cape Town, Zwane said he was still confident that amendments to the Mineral and Petroleum Resources Development Act (MPRDA) would be passed by Parliament by the end of this year.

The bill is currently before the National Council of Provinces (NCOP) for further deliberations.

“At some point this (oil and gas) sector must be governed by its own act after the passing of the MPRDA,” Zwane said at the colloquium.

The oil and gas industry has lobbied for some time to have separate legislation to the MPRDA and former energy minister Tina Joemat-Pettersson also said on occasion that government was planning a new law that will separate parts of its oil and gas rules from legislation governing the mining industry.

Fin24 earlier reported that the petroleum industry had successful negotiations with Zwane during Operation Phakisa held late last year.

The Department of Mineral Resources agreed to relook a clause in the MPRDA that pertains to free carried interest in which the state would levy a 20% free carried interest in all new exploration and production rights, as well as a further participation interest in the form of acquisitions at either an agreed price or through production sharing agreements. 

At the colloquium, Zwane said he is a minister known for pushing for transformation, but assured industry stakeholders that he is mindful of their need to make profits.

“Whatever you invest, you must be able to get (something) back and make a profit. I agree with that assumption. But it’s impossible to ignore the challenges of unemployment, poverty and inequality.”

Zwane said by transformation he does not imply that previously disadvantaged people should just “come in and be favoured”.

“That’s not the intention. We must understand where we’re coming from and give each other an equal opportunity. I’ve repeated that the previously disadvantaged must also work hard and earn their living,” he said, but added that the industry now has an opportunity to map a way forward and transform as much as it can.

“This workshop must be able to tell me later this is how far we can go (with transformation). If that happens I’ll come and support you.” 

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