STATE PETROLEUM COMPANY BILL ON ITS WAY TO PARLIAMENT

STATE PETROLEUM COMPANY BILL ON ITS WAY TO PARLIAMENT

• 18 October 2024
• Minerals & Energy
• SA Legal Academy

Please note: Parliamentary papers have confirmed that, on 29 October 2024, the draft Bill was submitted and referred to the National Assembly and NCOP committees concerned for information and planning purposes only. It has yet to be certified by the Office of the State Law Adviser and formally tabled.

An explanatory summary of the South African National Petroleum Company Bill has been gazetted in anticipation of its formal introduction in Parliament. The version approved by Cabinet for tabling has since been published by the Parliamentary Monitoring Group. However, at the time of writing it had yet to be certified by the Office of the State Law Adviser.

Released in draft form in November 2023 for comment, the proposed new piece of legislation seeks to:

• give effect to a June 2020 Cabinet decision on merging PetroSA, the South African Gas Development Company and the Strategic Fuel Fund Association, and
• to that end ‘provides for the establishment of a state-owned company’.

Against that backdrop, the explanatory summary’s list of objectives focuses on governance matters. However, a media statement on the Cabinet meeting at which the Bill was approved for tabling notes that it includes provisions enabling the state-owned company envisaged to:

• ‘hold oil and gas exploration rights on its own’, as well as
• ‘shares in privately held rights’ (apparently through the free-carried interest mechanism, which is defined in the Bill’s approved, uncertified version).

This is noting that ‘local refining capacity … is largely held by international oil companies’, which – in ‘shutting down refineries’ – are placing the security of liquid fuel supply in South Africa at risk.

• explanatory summary
• Cabinet media statement
• Bill approved for tabling 
• November 2023 draft Bill

Published by SA Legal Academy Policy Watch

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