HomeIndustry SectorsFinance and PolicyMinister Mahlobo optimistic about oil and gas sector growth

Minister Mahlobo optimistic about oil and gas sector growth

On Monday, the newly appointed South African minister of energy, David Mahlobo, addressed delegates attending an oil and gas conference in Cape Town, highlighting energy as a “critical resource” to drive growth and development of African economies.

“The African Union Agenda 2063 calls on us as African governments and states to take certain steps now to ensure the continent’s growth and sustainable development.

“In this regard, energy is a critical resource and an input element that must be used to propel our economies towards a growth trajectory in the next 50 years,” Mahlobo stressed.

 Local future for oil and gas

As a net oil and gas importing country, the minister said these interactions are of critical importance to achieve energy security.

He added “that given the interest in our offshore acreage, we will soon be producers ourselves.”

Liquid fuels

Noting historical challenges, Mahlobo noted that the National Development Plan (NDP) – launched in 2012 under the country’s President Jacob Zuma – identifies the country’s lack of refining capacity.

“Although the country has six refineries, four of which are crude oil refineries, our country imports an increasing share of refined products,” he said.

“In order to address some of the emerging areas of concern, the Department of Energy undertook an audit of South African refineries and is developing a 20 Year Liquid Fuels Infrastructure Roadmap, which will be incorporated into the Draft Integrated Energy Plan,” the minister explained.

He added: “We are also in the process of finalising work to enable a decision about future additional refining capacity for the country.”

Demand growth in Africa

According to Mahlobo, demand for liquid fuels in Africa is on an upward trajectory.

“In Africa alone, a total of 9 refinery projects of 1.56 million barrels per day are being planned.  We are aware that Nigeria is leading with work around one mega refinery of 650,000 barrels per day,” he noted.

Therefore, he said that the need for refinery expansion in South Africa is therefore not misplaced.

Gas developments

Placing impetus on investments in petroleum and gas infrastructure, Mahlobo said that some amendments to the Petroleum Pipelines Regulations, especially given the need to promote investments in the Liquefied Petroleum Gas (LPG) infrastructure, are underway.

“Positive developments in the LPG infrastructure are emerging already and we are encouraged by such.  Recently two new LPG import terminals were commissioned not far from here.  This is in addition to the liquid bulk terminal that was also commissioned by Burgan,” he said.

With regard to liquefied natural gas (LNG) infrastructure, the minister said the country is “planning for investment in LNG import terminals, storage and regasification facilities, primary high-pressure gas transmission pipelines and secondary distribution pipeline networks.”

With strategic engagements underway with oil and gas producing countries, President Zuma as the Chairperson of SADC has called for the development of a masterplan to facilitate regional gas trade within SADC.

The minister highlighted: “On economic transformation, we are, together with relevant South African stakeholders, including the liquid fuels industry, developing the petroleum sector codes to promote transformation in the sector, a key moral and legislative commitment to ensure the maximum and meaningful participation of the disadvantaged sections of our society.

“We have to work together towards a radically transformed and inclusive economy. This is a non-negotiable in our context, and includes emphasis on skills transfer and enterprise development to create additional opportunities for transformation and empowerment in the country, the regions and the continent as a whole.”

Read the full speech here.


Featured image: Stock

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.