Minister sees chance oil may split from South African mines law

10/8/2014

Minister sees chance oil may split from South African mines law

ANDRE JANSE VAN VUUREN

JOHANNESBURG, South Africa (Bloomberg) -- South Africa may split rules for the nascent oil and gas industry from its amended mining laws should the government find the regulations are at odds with the constitution, the mineral resources minister said.

The government is testing whether the changes to the Mineral and Petroleum Resources Development Act are constitutional after they were passed by Parliament earlier this year. There are “interesting opinions in that regard,” Ngoako Ramatlhodi told reporters in Johannesburg Oct. 8. Oil, gas and mining “are different animals, therefore justifying different sorts of rules,” he said.

Ramatlhodi asked President Jacob Zuma to hold off on signing the changes into law pending a review by a committee comprising himself and the ministers of finance, trade and industry, energy and economic development. Proposed changes to the 2002 act include giving the state the right to a free 20% stake in all new energy ventures and buy an unspecified additional share at an “agreed price.” Exxon Mobil Corp. and Total SA are among those that have objected to it on the grounds that it’s too vague and will undermine their businesses.

The law can only be referred back to Parliament if its constitutionality is in doubt, even if the government is concerned that some of the proposed policy changes are inappropriate, said Ramatlhodi, who was appointed in May. Should the legislation go back to lawmakers, it would be processed more quickly because they are familiar with the issues, he said.

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