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China Petrochemical News Network reported on May 16, according to Oil & Gas News, according to a new upstream oil bill, South Africa hopes to obtain 20% of free shares in oil and gas exploration and production companies, which allows the minister to reserve oil for black investors.
Earlier this week, the Cabinet approved the Upstream Petroleum Resources Development Act, which aims to help regulate an emerging industry in South Africa.
If the bill is passed in its current form, it will mean a large amount of money flows into the national treasury.
However, due to climate change, COVID-19 affects the investment decisions of oil giants.
Reuters saw the bill saying: "The state has the right to own 20% of the carried interest in oil, including the exploration and production stages.
The bill defines "carried interest" as the state's participation in the interests of oil rights.
Zhu Jiani excerpted from Oil & Gas News
The original text is as follows:
S.
South Africa wants a free 20% stake in oil and gas exploration and production ventures under a new upstream petroleum bill, which allows the minister to reserve petroleum blocks for Black investors.
The Upstream Petroleum Resources Development Bill, approved by cabinet earlier this week, is meant to help regulate a nascent industry in the country following new offshore gas finds by France's Total TOTF.
If the legislation is passed in its current form it could mean vast sums flow into state coffers.
But it could also put off investors at a time when the world is turning away from fossil fuels due to climate change, and the impact of COVID-19 weighs on investment decisions by oil majors.
"The state has a right to a 20% carried interest in petroleum rights, including in both the exploration and productions phase," said the bill seen by Reuters.
The bill defines “carried interest” as state participation through an interest in a petroleum right, “which interest vests exclusively for the benefit of the State and the costs of which are borne by the carrying holder of a petroleum right”.
