S oil and gas SA’s oil and gas guardian Government has designated Petroleum Agency SA (PASA) as the custodian of South Africa’s oil and gas resources. Its mandate is to attract investment to South Africa’s upstream industry and to regulate the activities of oil and gas explorers and producers in our country. Service Magazine interviews Dr Phindile Masangane, CEO of PASA. What is the thrust of PASA’s new five-year strategy? The Agency has identified five new strategic objectives below to enable it to effectively deliver on its mandate by capturing the opportunities being presented by the changes in the environment as well as ensure that the Agency overcomes the challenges that it faces. These are: • Increasing exploration activity – to move the industry from a predominately exploration phase to a development and production phase. • Sustainability – to ensure the company has sufficient financial and human resources to carry out its responsibilities into the foreseeable future. • Advocacy – to provide input into policy and regulations that impact the industry we regulate. • Digital transformation – to adopt new, more efficient technologies. • Operational excellence – to ensure efficiency of our process. These five strategic objectives will position the Agency as a strategic entity of government in its goal of diversifying the energy mix and developing the domestic gas market, embracing digitisation and automation to improve efficiency, rising to the requirements of the new legislation and finding a place in the global transition towards a low-carbon future. Please describe the changes that are happening internally at PASA and in the industry, and why these changes are necessary to move forward. The Agency has been restructured internally in line with the new strategy. IT has been elevated beyond its former role as a support function, to drive the company’s digital transformation. In addition, the Agency will now have a communications and stakeholder engagement function to respond to the negative perception about the oil and gas industry. South Africa’s energy mix is coal-dominated therefore gas is a transition fuel to a cleaner energy future. With a strong international focus on decarbonisation, what is PASA’s position on the continued exploitation of fossil fuels? The transition to cleaner fuels and renewables is inevitable if the world is to reduce the negative impact of climate change. South Africa is a signatory of the Paris Agreement and has committed to a “Peak- Plateau-Decline” carbon emission trajectory. The government policy is to diversify the country’s energy mix, which is currently coaldominated, to a lower-carbon future by introducing proportionately higher renewable energy resources such as wind and solar, into the energy mix as well as gas-to-power. Gas burns with less than half the CO2 emissions from coal and additionally has no sulphur oxide emissions. It is thus a suitable transition fuel towards a lower-carbon economy for South Africa especially since gas-to-power technologies are flexible and would complement the intermittent renewable energy being added to the national grid. PIC CREDITS: Photographic services, Shell International Limited What conditions are contributing to the sense that the market for gas in South Africa is set to grow exponentially? The two recent world-class discoveries on our South Coast places South Africa at pole position to be a notable gas-producing country. Once indigenous gas becomes available, it becomes much easier for the domestic gas market to develop including beneficiation of the gas to chemicals.
oil and gas S The two recent world-class discoveries on our South Coast places South Africa at pole position to be a notable gas-producing country. Is there international interest in South Africa’s oil and gas resources? Definitely – you need only take a look at the exploration map on our website [www.petroleumagencysa.com]. You will see international companies such as Total, Shell, ENI, Kosmos, Africa Energy Corporation, Azinam, Impact Oil and Gas, CNR, Qatar Petroleum, New Age and others all hold interests in our exploration acreage. In addition, we have agreements in place with international service providers to acquire seismic data. Please outline the implications of the passing of the Upstream Petroleum Resources Development Bill by the South African parliament: does it provide greater certainty to investors? Is the link between exploration rights and development rights made clear? Oil and gas exploration and production is currently regulated under the Mineral and Petroleum Resources Development Act, 2002 (MPRDA). The Bill will repeal and replace the relevant sections pertaining to upstream petroleum activities in the MPRDA. The Draft Bill therefore provides greater policy certainty and a stable environment for investment in the South African oil and gas sector. The Bill provides security of tenure by combining the rights for the exploration, development and production phase under one permit. What changes are envisaged in the amendment to the National Environmental Management Act of 1998 (NEMA)? How will these changes affect environmental compliance? The National Environmental Management Laws Amendment Bill, which was revived in June 2020, proposes various amendments to the National Environmental Management Act, 1998. Proposals that may positively impact upstream petroleum operations include the provisions empowering the Minister responsible for mineral resources to delegate a function entrusted to him in terms of the Act to any organ of state and designate, as an environmental petroleum inspector, any staff member of any other organ of state that executes a regulatory function. The Minister in this regard may delegate certain competent authority functions to the Petroleum Agency SA, which may improve the turnaround timelines for making decisions on the environmental Authorisation (EA) applications. Furthermore, designating staff members of the Agency as environmental petroleum inspectors means that all compliance monitoring and enforcement functions prescribed in the Act, as far as upstream petroleum operations, would be efficiently executed. S Follow PASA on Twitter – @sa_petroleum. PASA CEO Dr Phindile Masangane was appointed as the CEO of the South African upstream oil and gas regulatory authority, Petroleum Agency SA, 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 included supporting the national government in developing energy policy and regulations for diversifying the country’s energy mix. An alumnus of three universities, Dr Masangane has a BSc (Mathematics and Chemistry) from the University of Swaziland, a PhD in Chemistry from Imperial College, London and an MBA from the University of the Witwatersrand. Dr Phindile Masangane, CEO of PASA PROFILE: PETROLEUM AGENCY SA PASA has successfully attracted major explorers to South Africa and facilitated the acquisition of many new large seismic surveys and some exploratory drilling, through a period affected by legislative issues and a major oil price crash. The company has grown from an organisation of about 25 staff members to 85 today and is held in extremely high regard by the local and international oil and gas industry that it serves. PASA evaluates, promotes and regulates oil and gas exploration and production activities in South Africa and archives all relevant geotechnical data. The Agency acts as an advisor to the government and carries out special projects at the request of the Minister of Mineral Resources and Energy. PASA plays an important role in developing South Africa’s gas market by attracting qualified and competent companies to explore for gas. Another major focus is increasing the inclusion of historically disadvantaged South African-owned entities in the upstream. Currently, natural gas supplies just 3% of South Africa’s primary energy. A significant challenge facing the development of a major gas market is the dominance of coal. Opportunities for gas lie in the realisation of South Africa’s National Development Plan (NDP) and the Integrated Resource Plan (IRP).