By: Dustin Van Liew - SVP Global Policy, EnerGeo Alliance

After years of declining investment, a shrinking productive base, and persistently high unemployment, South Africa is facing real economic pressure. GDP growth has effectively stalled, averaging a mere 0.7% p.a. over the last decade. Last year, the unemployment rate reached a staggering 32.9%, one of the highest in the world. Beyond these concerning figures, the country is facing a seemingly weak appetite for large-scale developments and degrading critical infrastructure, in turn creating a cycle that threatens the prospects of a rebound.

While it is imperative that South Africa begin to chart its path towards the energy evolution, the country cannot afford to ignore the dismal economic realities. Recent oil and gas discoveries on the Namibian side of the Orange Basin, which is shared with South Africa, offer an unparalleled opportunity to overcome these challenges by driving economic growth and providing energy security. The upstream oil and gas sector is ready to move South Africa forward—but it needs regulatory certainty to deliver.

The opportunity

For over 50 years, EnerGeo Alliance has served as a global trade association for the energy geoscience and exploration industry, representing the companies that discover, develop, and deliver energy to the world. 

Our members include onshore and offshore survey operators and energy companies, and we work globally to advance informed, science-based government policies and responsible energy exploration, production, and operations. 

Throughout the world, the oil and gas sector is a major economic engine. In the United States, for example, it contributes nearly 8% to national GDP. The oil and gas industry could similarly drive economic growth and deliver energy security to South Africa.

Last year, EnerGeo commissioned a report to assess the economic opportunities that would derive from expanded oil and gas production. The report found that the Block 11B/12B project alone could boost South Africa’s annual GDP by almost R23 billion, while the Brulpadda and Luiperd project could contribute an additional R8.6 billion annually to the fiscus in taxes. The sector could create over 20,000 direct, indirect, and induced jobs, with a significant number of these jobs expected to be in manufacturing. The industry could also boost small and medium enterprises.

Furthermore, developing an upstream oil and gas industry would reduce dependence on volatile foreign fuel supplies. In 2024, South Africa imported approximately 8,182 million litres of crude oil and 17,406 million litres of refined product, as well as 156 billion cubic feet of natural gas. By reducing these imports, South Africa could save billions of rand in foreign exchange, build out infrastructure, and strengthen energy security and trade balance. Given South Africa’s geographic position and industrial roots, the country could even supply several neighboring countries, in turn bolstering energy security throughout the region.

Ultimately, well-managed upstream exploration could even support the shift to alternative energy sources and drive the energy evolution forward.

Bureaucratic barriers

Despite the monumental opportunity, regulatory uncertainty threatens the industry’s future. Industry needs predictability in order to effectively strategize and make investment decisions. It’s also integral that regulations are both fit for purpose and implemented in a timely manner in order to effectively facilitate exploration and ultimately deliver energy.

EnerGeo Alliance welcomes the work undertaken by the Department of Mineral and Petroleum Resources (DMPR) to address the concerns of industry stakeholders and update the draft Upstream Petroleum Resources Development Act Regulations (UPRDA). In particular, the DMPR’s active engagement with the industry is encouraging for the future of exploration in South Africa. We support initiatives to streamline the regulatory framework and define timelines that improve the permitting process and encourage investment – this also means ensuring consultation requirements are focused on those directely impacted by a proposed activity while separately allowing any citizen to generally comment to the government.

South Africa’s energy future

Developing a robust domestic upstream oil and gas industry in South Africa would position the country well for economic recovery and ultimately expansion. Recent resource discoveries are just the beginning of the country’s potential, but leaders need to adopt policies that draw investment and move the nation forward.

EnerGeo looks forward to working with regulators to share our experiences, offer our expertise in creating a smoother permitting process, and partner with the governments and local communities to build a secure and reliable energy future for all of South Africa.

We’re ready to move South Africa forward.