South Africa To Boost Oil And Gas Industry, Reduce Foreign Dependency

South Africa is focusing on developing oil and gas resources to ensure that there is energy security in the country while oil foreign dependency is reduced.

Mineral Resources and Energy Deputy Minister, Nobuhle Nkabane, spoke at the Southern Africa Oil Gas Conference on Wednesday regarding how important it is to "accelerate the exploration of oil and gas both onshore and offshore."

She added, "Having our own petroleum resources will reduce our dependency on foreign oil and cushion our economies, in particular our citizens against imposed whirlwinds of crude price volatility," SA News reported.

The minister went on to share that the government has already initiated policy intervention processes to make sure that there is development and growth in the oil and gas industry.

"The first intervention is the development of the Gas Master Plan which is a policy that outlines and guides the critical role of gas in South Africa while providing policy direction to the gas industry," she explained.

Minister Nkabane further said that the Department of Mineral Resources and Energy (DMRE) "have also developed the Upstream Petroleum Development Bill seeking to ensure that the upstream petroleum sector is no longer regulated under the Mineral and Petroleum Resources Development Act, 2002 (MPRDA), but under discrete petroleum legislation."

She continued, "We believe the de-coupling of the Upstream Petroleum Development Bill from MPRDA will bring regulatory certainty and hopefully shore up investor confidence."

Deputy Minister Nkabane noted that natural gas is an essential component in South Africa's Integrated Resource Plan (IRP) 2019, adding that it contributes at least 3 percent of the country's energy supply.

Furthermore, she explained that using natural gas will also help to contribute to South Africa's quest to lower emissions output. "[The] continued exploration and discovery of indigenous gas is crucial for meeting our climate change targets and securing energy supply," the minister added.

Minister Nkabane pointed out that maiden gas reserves in Mpumalanga represent a major boost in electricity generation capacity, sharing that it is "the epicenter of South Africa's power generation because [it] has a high concentration of power stations, therefore the discovery of gas positions the province at the center of the just energy transition and as a source of reference for the country's emission-reduction targets."

The minister said that the European countries are looking at Africa to diversify their gas supplies, adding that it will provide a good opportunity and market for local gas beyond South Africa's own use.