Government committed to growing oil, gas industry

Thursday, November 29, 2018

Mineral Resources Minister Gwede Mantashe says his department will work towards creating an enabling environment for the oil and gas sector to be able to do business in the country. 

Addressing a breakfast engagement session with stakeholders in the oil and gas industry in Cape Town on Thursday, Mantashe said the department recognises the sector’s potential to grow the economy and create jobs, and said he has asked the department to be open to engaging the industry on legislation from day one. 

“Together, we will develop this sector. We know that government cannot grow and develop this sector [alone]. It is you who can develop and grow this sector and it is us who must create the necessary environment for you to develop the sector,” he said. 

The Minister’s engagement session with industry players comes as the country, under the directive of President Cyril Ramaphosa, is on a drive to attract investment into the economy to bolster economic activity and create jobs.

Mantashe said the immediate challenge for all South Africans was the need to grow the economy in order to be on par with other developing countries who are managing to grow their economies at desirable levels. 

He said while the objective of the private sector is to grow their businesses and amass wealth, he said that government would create an enabling environment for the sector to do business and that in the process, this will create jobs. 

“As a country, we are hungry for investment… we are not doing you a favour. We want you to invest in our country and in the process, help us grow our economy but in the process, [for investors] make money.” 

Mantashe said he was in support of the sector being transformed into one where “black capitalists” are created, and one where BEE policies do not just create black shareholders, but promote the creation of black executives, who are involved in the day-to-day operations in the sector.

Special focus 

Government’s decision in 2013 to separate the oil and gas industry from the mining industry, Mantashe said, was a correct one and that it was important for the oil and gas sector to be developed into a strong, stand-alone sector. 

He said creating an enabling environment also included engaging the sector ahead of introducing legislation aimed at regulating the sector. 

“What I said to the team… [is that they must] engage the sector before actually starting the Parliamentary processes. The sector must see it, must be engaged and even before we start the formal public hearings, take the industry with you. Let them be part of seeing what [we are drafting] in the legislation,” he said. 

During a question and answer session, Mantashe said while the aim was to introduce the Bill into the sixth Parliament, it was important to share it with the industry to ensure that they sign off on it so that it does not get stalled during public consultations. 

Science and Technology Minister Mmamoloko Kubayi-Ngubane, who also attended the breakfast, said her department was collaborating with the Department of Mineral Resources on several projects, especially on shale gas. 

She said as exploration work continues, the Department of Science and Technology, through the Science Action Plan (SAP), will assist with research in order to cover some gaps that were identified in the initial research on fracking. 

“The areas of research will include geology, gas resource quantification, shale gas extraction, water, waste, bio-diversity, health, social impacts and skills development. 

“In short, the SAP proposes a structured research programme in this six key areas that will be used to strengthen policymaking, capacitate South Africa, ensure that negative environmental impacts are minimised and support emergence of shale gas industry.  

“The SAP focuses on the development of new knowledge in the science, governance and engineering fields as it relates to safe extraction of natural gas from the Karoo basin.  More importantly, the SAP acknowledges work that is being done.” 

Kubayi-Ngubane said the department seeks to support a sustained research and development programme for the burgeoning offshore oil and gas industry and offshore geoscience in general.    

She said burgeoning offshore oil and gas will be done while prioritising the use of South African human capital, technological resources and the building of local capacity [skills and competency]. 

“We believe that our country has huge potential in the oil and gas industry. Working together as government and the private sector not only will we ensure security of supply of energy, but we also ensure that we begin to deal with the triple challenge of poverty, unemployment and inequality.

“Following the Presidential Investment Summit, we as government are committed to providing the necessary support to the private sector through policies and other means so that we can all grow our economy.” –