South Africa faces mounting pressure to finalize implementing rules for the Upstream Petroleum Resources Development Act, with industry advocates warning that the absence of those regulations is blocking long-term investment in offshore oil and gas exploration.
The regulatory gap sits at the center of a debate that has sharpened following two significant court rulings. Last month, the Western Cape High Court rejected an application by environmental and fishing groups seeking to halt an offshore seismic survey in the Orange Basin off the West Coast. In the same period, the Constitutional Court permanently halted offshore gas and exploration rights along the Wild Coast that had been granted to Shell and Impact Africa. Both decisions, taken together, have clarified rather than resolved the procedural questions the industry says government must now answer.
Ross Compton, senior director for global policy at the EnerGeo Alliance industry group, argues that the rulings actually reinforce the case for regulatory action. “The court cases have underscored the need for certainty around the regulatory processes,” he said, adding that the Western Cape High Court decision cleared the way for the company involved to proceed with its projects. Neither ruling, he contends, amounts to a blanket prohibition on seismic surveys or hydrocarbon development. What they do is reaffirm the importance of proper consultation and environmental assessment procedures, which the UPRDA’s missing implementing regulations are supposed to establish.
Those regulations would set the procedural framework for exploration permits, environmental review, and public participation requirements. Without them, Compton says, the industry cannot make the long-term investment decisions that offshore exploration demands.
The minister responsible for the sector has signaled support for moving forward. Gwede Mantashe, the minister of mineral and petroleum resources, stated in a written parliamentary reply in June that “South Africa’s oil and gas upstream potential needs to be unlocked. This is one of the best ways of insulating the country against oil shocks.” Compton frames the urgency in similar terms, pointing to what he describes as a “gas cliff” as existing domestic supplies dwindle, alongside limited refining capacity and declining coal generation. South Africa’s population, currently between 59 and 60 million people and continuing to grow and urbanize, requires a diversified energy portfolio, he argues, one in which natural gas sits alongside renewable technologies. “Natural gas sits within that nucleus, with all the different elements that you would have seen in the integrated resource plan,” he said.
Meanwhile, the regulatory push faces organized opposition from environmental advocates who question whether the legislative framework itself is fit for purpose. Lisa Makaula, advocacy lead at Green Connection, contends that the UPRDA and the proposed Gas Bill are misaligned with South Africa’s Climate Change Act and create unquantified environmental liabilities for taxpayers. She argues that any finalized legislation must strengthen public participation protections, safeguard environmental standards, and ensure fair compensation for communities affected by gas infrastructure development, particularly those holding customary or informal land rights.
The conflict between those positions is, at its core, a governance question about mandate and accountability. The Climate Change Act imposes obligations on the state. So does the constitutional right to a healthy environment. The UPRDA, once its regulations are in place, will impose obligations on industry. Whether the Gas Bill, still pending, can reconcile those competing legal frameworks is a question that parliament and the relevant regulatory bodies have not yet answered.
How the government resolves that question, and how quickly it moves to finalize the UPRDA’s implementing rules, will determine whether South Africa’s offshore hydrocarbon potential is developed under a coherent regulatory regime or remains contested in court.