A South African lawmaking committee agreed to revise draft laws to give the state has the right an unspecified share in all new oil and gas ventures at an “agreed price” or part of output, in addition to a previous provision handing it a free 20 percent stake the projects.
Eight ruling African National Congress lawmakers voted in favor of the amendment to the 2002 Mineral and Petroleum Resource Development Act at a meeting of Parliament’s mineral resources committee in Cape Town today. The change was opposed by two members of the Democratic Alliance, the main opposition.
A previous draft of the law proposed giving the state a 20 percent free stake in new energy projects and giving it the right to buy an additional 30 percent of energy projects at “fair market value.” Those provisions were opposed by companies including Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc. (RDSA)
The new formulation will “entitle the state to take over oil and gas companies in their entirety,” James Lorimer, the Democratic Alliance’s shadow minister of mineral resources, said in an e-mailed statement. “This last-minute change shows a depth of economic illiteracy that is hard to fathom. It is likely to end any prospect of oil companies spending on exploring what is thought to be major oil and gas reserves off South Africa’s coast.”
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