The Chairperson of the Portfolio Committee on Mineral Resources and Petroleum Resources, Mr Mikateko Mahlaule, expressed his approval of President Cyril Ramaphosa’s signing of the Upstream Petroleum Resources Development Bill into law on October 29, 2024. Mr Mahlaule praised the committee’s hard work in gathering public input from South Africans across all provinces, ensuring the Bill reflected the people’s voices. The new Upstream Petroleum Resources Development (UPRD) Act will regulate the high-investment upstream petroleum sector separately from the mineral sector. The Act designates a Petroleum Agency in Section 9 to oversee exploration, development, and production of petroleum, including technical support to the minister, application processing, and recommendations. Section 34 establishes the State Petroleum Company to manage state participation with a 20% interest in petroleum rights.
In October 2024, the Cabinet approved the South African National Petroleum Company (SANPC) Bill for Parliament, merging PetroSA, iGas, and the SFF to form the State Petroleum Company. The Department of Mineral Resources and Energy (DMRE) published an explanatory summary of the SANPC Bill in the Government Gazette, seeking public feedback until December 20. Section 31 of the UPRD Act mandates a minimum 10% black person participation interest in petroleum rights, which can be diluted to 5% with State’s right of first refusal for capital raising. Sections 101 and 102 outline penalties for unauthorized petroleum operations, including fines up to 10% of annual turnover or imprisonment.
Despite these provisions, Section 111(1) states that the UPRD Act will only take effect upon the President’s proclamation in the Gazette, meaning sections 9, 31, 34, 101, and 104 remain inactive until then. The Act aims to enhance regulation and participation in South Africa’s petroleum industry, ensuring compliance with strict guidelines to drive responsible exploration and production activities.
