Until recently, South Africa’s oil and gas prospects looked bleak. Undermined by lower oil prices and political and regulatory uncertainty, investment in the sector had been limited. That changed, however, when newly elected President Cyril Ramaphosa made the signing of South Africa’s Minerals and Petroleum Resources Development Act (MPRDA) Amendment bill a priority of his new administration. If passed, the bill, which has languished in front of parliament for five years, is expected to dramatically improve incentives for offshore exploration. With oil prices on the rise and French energy giant Total expected to drill its first well on the highly touted offshore Brulpadda Prospect at the end of 2018, South Africa’s oil and gas prospects have rarely looked better.
Meanwhile, South Africa holds strong as the continent’s leading power player, with more than 45,000 MW of installed capacity and several new projects under development. Historically dependent on coal and nuclear for its electricity, South Africa is quickly diversifying its energy base. The country’s Integrated Resource Plan for electricity is enabling large increases in gas, wind and solar capacity by 2030. And the arrival of President Ramaphosa has been a catalyst for settling a simmering national debate between the use of nuclear versus renewables. In April, new Energy Minister Jeff Radebe declared a “new dawn” for renewable energy in South African, signing 27 agreements for independent power producer (IPP) projects with a combined value of $4.5 billion and capacity of 2,300 MW.
In fact, 2018 is a “new dawn” for the entire South African energy sector, as rising commodity prices, increased demand and an overall improvement in investor sentiment is spurring growth. In “Africa Energy Series – South Africa 2018,” we gather the policy and decision makers in one of the continent’s most dynamic energy markets to produce the definitive resource for investors.
The book is launching soon.