During an address in Cape Town this week, Deputy Minister of Mineral Resources and Energy Nobuhle Nkabane stressed the importance of investing in gas, stating that gas is crucial and is “one of the key components of South Africa’s Integrated Resource Plan of 2019.”
Nkabane explained that the lack of reliable energy has impacted the country, and that “high fuel prices results in food inflation and increased transportation costs that negatively affect poor households.”
This calls for the need to accelerate the exploration of oil and gas resources, thereby enabling energy self-sufficiency and reducing the reliance on foreign oil imports. As such, South Africa is prioritizing regulatory support mechanisms with the aim of improving investor certainty.
“In South Africa, we have initiated intervention processes to enhance the development and growth of our 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 said.
Nkabane clarified that government has created the Upstream Petroleum Resource Development Bill with the aim of transitioning the regulation of the upstream petroleum sector from the Mineral and Petroleum Resources Development Act to dedicated petroleum legislation.
These policies lay the foundation for substantial foreign investment flows into South Africa’s gas market, an industry which, according to Petroleum Agency of South Africa Chairperson of the Board Satish Roopa, is critical for addressing load-shedding and stabilizing supply. Roopa emphasized that addressing South Africa’s energy crisis will require scaling-up the utilization of gas.
Natural gas already represents an important part of South Africa’s energy mix, accounting for 3% of supply. Used in a variety of applications such as manufacturing and transportation, the resource plays a strategic part in reducing carbon emissions and cost-effectiveness across the South African economy.
According to Nkabane, the role gas plays in South Africa is poised to significantly increase. Recent discoveries of natural gas in provinces such as Free State and Mpumalanga hold the potential to boost electricity generation capacity and support emission reduction targets. Additionally, regional discoveries such as those made in the Namibian side of the Orange Basin promise new opportunities for sustainable energy supply.
“We trust that the development of the domestic Namibian gas market emanating from these finds will benefit the region in terms of substituting diesel-powered generation resources,” Nkabane said.
