Authors: Peter Leon, Paul Morton, Amanda Hattingh and Ernst Muller
A year ago, on 27 February 2019, Total S.A. announced a major discovery of gas condensate in the Outeniqua Basin (Brulpadda prospect, Block 11B/12B) offshore South Africa. This deposit reportedly contains around one billion barrels of oil equivalent.1
This discovery had two significant consequences. First, it identified South Africa as one of the world’s new frontiers for oil and gas exploration. Second, it placed a spotlight on the inadequacy of South Africa’s existing regulatory regime and the urgent need to develop upstream petroleum legislation.
Authors: Peter Leon, Patrick Leyden, Ernst Muller and Amanda Hattingh
Last week StatsSA (South Africa’s official statistics authority) announced that South Africa’s economy contracted by 0.6 per cent during Q3. It is likely to contract further in Q4 as a further round of electricity blackouts occurs as a result of Eskom load shedding. The economy’s current travails are mainly driven by a contraction in the mining, manufacturing and transport sectors. The mining sector, in particular, contributed 6.1 per cent less in this quarter to the country’s Gross Domestic (GDP) Product following a decrease in production of platinum group metals, coal and iron ore.
StatsSA’s announcement followed that of the International Monetary Fund (IMF) in its Article IV Mission to South Africa on 25 November 20191 that South Africa’s medium term growth outlook remained subdued. The IMF explained this was largely due to stagnant private sector investment and exports coupled with declining productivity. This dearth of investment (both foreign and local) is in turn driven by a lack of reform to address weaknesses in the business climate, including regulatory constraints, labour market rigidities and inefficient infrastructure.2