South African government to hold 20 per cent of new oil and gas projects

rig OCt 11 The South African government has also reserved the right to purchase another 30 per cent interest in new oil and gas projects at market prices. (Image source: sxc.hu)The South African government has announced that it will hold a free 20 per cent stake in all new oil and gas ventures in the country, under new legislation

According to a Bloomberg report, South African minister for mineral resources Susan Shabangu said that the government has also reserved the right to purchase another 30 per cent interest in such projects at market prices.

South Africa reportedly imports 70 per cent of its oil and is looking to develop its oil resources to boost its economy. The country has been estimated to have huge potential for shale gas extraction in the Karoo desert, according to the US Energy Information Administration. The organisation has forecast that 13.73 trillion cubic metres of gas reserves lie under the semi-arid desert.

While oil and gas companies Exxon Mobil and Royal Dutch Shell have stakes in offshore blocks in the country, extraction is yet to commence, according to company sources.

Exxon plans to search for crude and natural gas off the coast of KwaZulu-Natal, while Shell is exploring oil prospects off the country’s west coast, Bloomberg reported.

Shabangu said the government has also approved a draft of technical regulations for the exploration and exploitation of petroleum by hydraulic fracturing.

“The proposed regulations prescribe good international industry practices which enhance safe exploration and production of petroleum. The state would further ensure that petroleum exploration would be conducted in a socially and environmentally balanced manner,” she said.

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