South Africa - 02

South Africa: PetroSA and Rosgeo Agreement to Attract Further Scrutiny

South Africa’s PetroSA announced on 4 September that it had signed an agreement with Russia’s Rosgeo to develop offshore blocks 9 and 11A. The announcement suggested that the deal will be worth around $400mn. However, the statement from PetroSA and Rosgeo did not address the deal’s terms and timeframe. As a result, although the agreement

South Africa - 05

South Africa: Gas IPP Program Suspended, Pending Final Electricity Plans

On 1 September, South Africa’s Minister of Energy Mmamoloko Kubayi announced that state-owned power utility Eskom will sign power producer agreement (PPAs) with the successful renewable energy independent power producers (IPPs) of Bid Windows 3.5 and 4 by the end of October 2017. The renewable sector, which has been frustrated by Eskom’s delaying tactics, applauded

South Africa - 04

South Africa: Sasol’s Tax Dispute Reflects Deep Problems at Revenue Authority

The dispute between Sasol and the South African Revenue Service (SARS) over outstanding tax liabilities and penalties of 12.8bn rand ($985mn) relates to the company’s international procurement of crude between 2005 and 2014. The controversy has intensified amid growing concerns over SARS’ politicization and increasingly precarious economic position.

South Africa - 01

South Africa: ANC Conference to Delay Finalization of IRP

Minister of Energy Mmamoloko Kubayi on 14 August renewed government’s support for nuclear power in her answer to a parliamentary question from opposition Economic Freedom Fighter (EFF) MP Mzingisi Dlamini. This has provoked concern that the government intends to ensure that nuclear power is given greater priority in the revised 2016 Integrated Resource Plan (IRP)

South Africa - 06

South Africa: Ramaphosa Campaign Gains Momentum

Ramaphosa appears to be gaining the advantage in his bid to succeed Zuma as ANC president. With less than five months to go before the ANC national conference in December, Ramaphosa is building on the Zuma camp’s failure to secure the advantage and key concessions at the July ANC policy conference. However, Ramaphosa still has

South Africa - 02

South Africa: Cape Town Case to Raise Pressure Over IPPs: Implications for Eskom

Cape Town Mayor Patricia de Lille announced on 27 July that the city will take Minister of Energy Mmamoloko Kubayi to court, in a bid to be allowed to purchase electricity directly from IPPs. Although Cape Town, led by the opposition Democratic Alliance (DA), is focused on renewable energy, the court case will have implications

South Africa - 05

South Africa: Zwane’s Proposed Mining License Moratorium: Warning Sign for Investors

On 19 July, Minister of Mineral Resources Mosebenzi Zwane provided a notice of intention to implement a moratorium on processing new and renewed prospecting and mining rights. This represents a significant escalation in tensions with the mining sector, even though there are major doubts over the legality of Zwane’s proposal. The moratorium appears to be

South Africa - 04

South Africa: Gigaba Announces New 14-Point Plan as Eskom’s Troubles Grow

On 13 July Minister of Finance Malusi Gigaba announced a new list of planned government interventions under the “Inclusive Growth Action Plan.” While the timeline for implementing various initiatives is welcome, the plan has been criticized for its failure to address the structural issues undermining long-term growth. Likewise, the plan did not address the lack

South Africa - 01

South Africa: Slow Signs of Exploration Activity in 2017

Despite political and regulatory uncertainty, PASA has continued to see some muted exploration interest in 2017, mostly in onshore blocks. Onshore activity continues to experience greater opposition from communities and other economic sectors, particularly agriculture. Additionally, environmental concerns and the potential impact on the fishing sector have raised opposition toward offshore exploration, including seismic surveys.

South Africa - 06

South Africa: ANC Policy Conference Signals Deepening Divisions to Come

While some radical policy interventions were raised at the ANC policy conference, such as nationalizing Sasol, they did not gain significant support. However, there were several debates that will negatively affect investor sentiment towards South Africa. These include a proposal to nationalize the South African Reserve Bank, which is coming under media attack for lacking