Minister says current gap in the global energy market is South Africa’s chance to go back to the drawing board.
Minister of Trade, Industry and Competition Parks Tau has thrown his weight behind calls for South Africa to capitalise on the current mayhem in the energy markets by firming up the country’s oil and gas exploration.
Although slightly outside the ambit of his portfolio, Tau made the comments during an all-encompassing fireside conversation at an Ahmed Kathrada Foundation business breakfast in Centurion on Wednesday.
It comes at a time of heightened geopolitical tensions that continue to create uncertainty and volatility in global oil markets.
Since the onset of the conflict in the Middle East, there have been disruptions to fuel supply chains, while under-recovery on fuel prices has continued to fluctuate.
Countries that rely heavily on imports of refined petroleum products remain vulnerable to global market shocks.
For South Africa, the volatility has pushed fuel prices to record highs, reintroduced inflationary pressures, and prompted caution from the South African Reserve Bank on policy rates.
While government continues to engage with suppliers to avoid any shortages, it has used this crisis to punt domestic production through the exploration of the country’s own untapped petroleum resources.
Tau says the current gap in the global energy market is South Africa’s chance to go back to the drawing board.
“Do we have resources? Yes. Oil, gas, we certainly have, and we are pioneers in the technology of coal to liquid fuel, through Sasol, so certainly we have resources.
“The debate in the country has been about sustainability, and sustainability I think is a measure of addressing the environmental, social and economic concerns and balancing them,” he added, referring, in part, to the reservations some non-governmental organisations have raised about exploration.
Minister of Mineral and Petroleum Resources Gwede Mantashe, whose department is responsible for exploration rights, previously said five offshore exploration projects have suffered setbacks since 2021 because of litigation by non-governmental organisations and communities near sites earmarked for drilling.
Exploration plans by TotalEnergies are among those frustrated by pushback from environmentalists.
Tau says government, oil companies and lobby groups need to find common ground on the matter.
“I don’t think we should be pitting development against the environment.
“I think that sometimes the debate becomes somewhat polarised to the extent that it’s considered that the environmentalists are not interested in development, or the development people are not interested in the environment,” he says.
“It’s not always true, it is about striking the balance.”
Along with the back and forth on exploration, South Africa’s refining capacity has been eroded over the years, adding another layer of difficulty for SA’s domestic aspirations.
Earlier on Wednesday, global markets were buoyed on the announcement by US President Donald Trump of a two-week ceasefire in the US-Israeli war on Iran.
The JSE’s benchmark All Share Index closed at almost 4% stronger on Wednesday. The rand traded at R16.34 against the dollar (7pm), regaining some power lost since the war started more than a month ago. However, the currency weakened a little overnight to around R16.44.
This article was republished from Moneyweb. Read the original here.
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