Godongwana cites regulatory barriers to gas exploration in South Africa — TimesLIVE
South African Finance Minister Enoch Godongwana said in Cape Town that the regulatory system, constitutional architecture, limited capacity of state bodies and corruption are obstacles to investment and economic growth. As TimesLIVE reports, he cited difficulties with gas exploration in the country as an example.
During a meeting with RMB chief economist Isaah Mhlanga, the minister said that companies which later discovered gas in Namibia had initially carried out exploration work in South Africa. According to him, they faced repeated legal challenges on environmental grounds, after which they abandoned the work and continued it in Namibia.
Lengthy approvals and court proceedings
In July, the South African Offshore Petroleum Association said that lengthy approval procedures and litigation had contributed to the halt of offshore exploration, despite discoveries made over the past decade. Association spokesperson Niall Kramer noted that in some other African countries, permission for offshore exploration can be obtained in three to nine months, whereas in South Africa the process can take up to five years.
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The organization called for specialized courts to enable faster consideration of disputes concerning offshore exploration. Godongwana said that Treasury Director-General Duncan Pieterse had raised with the justice department the possibility of establishing environmental courts. At the same time, the minister did not announce a decision to establish such institutions.
Companies' exits and the risk of a gas shortage
Not all cases of projects being wound down were linked to legal challenges. In July 2024, TotalEnergies announced its exit from offshore block 11B/12B off South Africa's southern coast, where it discovered natural gas and associated liquid hydrocarbons in the Brulpadda and Luiperd wells in 2019 and 2020. The company explained the decision by the economic difficulties of producing and marketing gas on the South African market; CNR International had previously exited the project.
Delays in developing domestic gas resources are increasing concerns about future supplies. South Africa expects a possible cessation of pipeline gas supplies from Mozambique's Pande and Temane fields by mid-2028. Industry representatives also warned a parliamentary committee that fragmented policy and regulatory uncertainty are delaying decisions on the anticipated gas shortage.
