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Service - Leadership in Government - Issue 75

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S interview Transforming the oil and gas sector Petroleum Agency SA is the State’s regulator for oil and gas. Service Magazine speaks to the woman at the helm of the Agency, Dr Masangane, CEO of PASA. Please tell us about yourself and your professional achievements? In my career, I have worked very closely with private companies implementing capital-intensive projects including deal structuring, modelling project economics, and ensuring bankability. On the other hand, being in a state-owned company, part of my responsibilities included supporting the government to develop policies and regulations that create an enabling environment for private investments in energy projects. So joining PASA at a time when the country is developing a domestic gas market anchored on indigenous gas production is something I am looking forward to and can draw on my experience to contribute towards achieving. You are the first formally appointed female CEO of PASA. Please share with us some of your ideas in terms of plans and strategies to grow and improve PASA. South Africa has a good petroleum resource potential which remains unexplored. Pre-1994 we didn’t have international oil companies in the country due to the political sanctions. All exploration activities for oil and gas in South Africa were undertaken by the then state-owned company, Soekor (pre-cursor of PetroSA). Oil and gas exploration is a highly capital intensive and high-risk business that cannot be left to a national oil company to do alone. In the democratic era, we have attracted several international companies including the majors like Shell, Total and ExxonMobil and have seen a number of our blocks being licensed. Significant exploration activity in terms of 2D and 3D seismic data collection has taken place since then, mainly by IOCs. Where we are, is that we need to enter the next phase in terms of exploration – that of significant drilling activities. This is what we need to move to prove the resources we have. That would be the game-changer for South Africa’s upstream oil and gas industry. The recent discovery by Total and its JV partners in Block 11B/12B (Brulpadda) is the first giant step in that direction. My role is to work with industry and the department to fast-track these developments including finalising the Upstream Resource Development Bill. As we enter this phase in our industrial development, we want to ensure that it is an inclusive and diversified industry in terms of race, gender and participation of SMEs. What are your visions for the agency in terms of transformation? PASA as an institution is sufficiently transformed. What keeps we awake at night is the transformation of the participants in upstream oil and gas which is dominated by the large multinationals which play a pivotal role. From our side, the question is – how do these IOCs bring in the small and medium local companies, especially those that are black-, femaleand youth-owned to meaningfully participate in the industry? How do we achieve meaningful skills development and transfer? Do you think being a woman in leadership in the energy sector will make a different impact on the company’s business? Women are naturally long-term visionaries and PASA is an important institution in the South African energy landscape. For the country to properly regulate the industry that is about to burst into the next phase of increased production, I am looking at the long-term sustainability of PASA as well as PASA’s capability to grow in tandem with the anticipated growth of the upstream oil and gas industry in South Africa. 14 | Service magazine

interview S How do you intend to make a difference in the energy sector in general? For some time the sector did not have the required industry long-term plans. Some of these plans have since been finalised. My role is to ensure that PASA partners with the private sector and other organs of the state to deliver on the government’s commitment to ensure the security of energy for the country. The only difference I can make is to deliver tangible results. What is PASA’s purpose in the South African energy sector? The Agency’s purpose is to facilitate and regulate oil and gas exploration to achieve production of indigenous oil and gas. This will ensure energy security and bolster economic growth, and play a strong role in addressing the eradication of poverty in South Africa. Our mission is to promote, facili-tate and regulate exploration and sustainable development of oil and gas contributing to energy security in South Africa. We envision and are working towards a diverse upstream industry that contributes to energy security through sustainable growth in exploration and development of oil and gas. This rewriting of the legislation governing oil and gas exploration and production gives South Africa a chance to address the requirements of the industry. Where is the agency at in terms of its position in the market? The Agency’s competitors are similar organisations in Africa, and beyond, attempting to attract oil and gas exploration investment to their countries. For a long time, South Africa has not been seen as a destination for such investment, paling into insignificance to countries such as Angola and Nigeria, both rich in oil, and even more recently Mozambique with its enormous gas discoveries. However, our political stability, relatively advanced development, independent courts and equitable terms have always been our strong hand. The recent world-class Brulpadda discovery and South Africa’s potential for shale gas are helping to change the perception and the upcoming stand-alone oil and gas legislation will further strengthen our position. Current opportunities lie in the development of the stand-alone Upstream Petroleum Resources Development Act and its accompanying regulations. This rewriting of the legislation governing oil and gas exploration and production gives South Africa a chance to address the requirements of the industry (as above) while also ensuring an equitable deal for the South African state and meaningful participation of South Africans in the industry. Please elaborate on the meaning of your tagline, Explore South Africa. The oil and gas exploration industry has always been extremely volatile, being subject to global economic forces and highly dependent on the fluctuating oil price. Also, oil and gas exploration is exceptionally risky in terms of initial, upfront capital investment with long periods before any return on investment and profit generation. To counter this, oil and gas exploration companies require equitable terms, and especially long-term stability and consistency in contractual terms together with political and independent judicial stability. Coupled with this would be a government that is committed to the easing of doing business and to facilitating entry into the upstream space. Local expertise in servicing the industry’s requirements in terms of human resources and services is also a strong advantage. A developed industrial economy offering opportunities for local monetisation of gas discoveries would also assist. One of the key roles of PASA is to promote the country’s petroleum resource prospectives. In summary, we are saying to the world “explore South Africa”. Our country has good petroleum resources that can drive this economy. Come and partner with us to mutually benefit from these resources. Is there anything else you would like to share with our readers? The next phase of drilling off the South Coast starts in September 2020. It is in deep waters, deeper than 1 400m, similar to the depths where the Rovuma gas finds in Mozambique were made. S Follow PASA on Twitter – @sa_petroleum. Dr Phindile C Masangane: PhD Chemistry, MBA, BSc (Mathematics & Chemistry) Dr Masangane was appointed as the Chief Executive Officer of the South African upstream oil and gas regulatory authority, Petroleum Agency South Africa (PASA), in May 2020. Before then, Dr Masangane was an executive at the South African state-owned energy company, CEF (SOC) Ltd, which is the holding company of PASA. Dr Masangane was responsible for clean, renewable and alternative energy projects. In partnership with private companies, she led the development of energy projects including the deal structuring, project economic modelling and financing on behalf of the CEF Group of Companies. Her responsibilities also include supporting the national government in developing energy policy and regulations for diversifying the country’s energy mix. In 2019, Dr Masangane was Head of Strategy for the CEF Group of Companies where she led the development of the Group’s long-term strategic plan, Vision 2040+ as well as the Group’s gas strategy. Between 2010 and 2013, Dr Masangane was a partner and director at KPMG responsible for the Energy Advisory Division. In this capacity, she successfully led the capital raising of -billion for the Zimbabwe power utility, ZESA/ZPC’s hydro and coal power plants expansion programmes. 71 SOUTH AFRICAN BUSINESS 2019 Below: Dr Phindile Masangane, CEO of PASA Service

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