Oil. Picture: REUTERS
Oil. Picture: REUTERS

The Offshore Petroleum Association of SA. which represents major oil and exploration companies, has appealed to the National Council of Provinces’ select committee on land and mineral resources not to reject crucial amendments to the Mineral and Petroleum Resources Development Amendment Bill which relate to offshore oil projects.

It says these amendments should be ring-fenced and not be subject to the legal dispute that has arisen over all the 57 amendments introduced by the Department of Mineral Resources after President Jacob Zuma referred the bill back to Parliament on both substantive and procedural grounds.

The department’s amendments include the amendments related to the state’s 20% carried interest with cost recovery in offshore oil projects, which Opasa supports.

The department’s amendments have become the subject of intense legal dispute as they were introduced after the referral, and some of them did not emerge out of the public participation process as required.

Several legal experts, including Parliament’s law advisers, have argued that the introduction of the amendments is not allowed by the joint rules of Parliament, which restrict Parliament’s consideration of the bill to the strict issues of concern raised by the president.

Opasa chairman Sean Lunn and advocate Geoff Budlender argued Opasa’s case before a meeting of the committee on Wednesday evening, saying the amendments relating to offshore petroleum projects were submitted by Opasa on its own behalf to eight of the nine provincial public hearings on the bill that have taken place over the past few months. They therefore fell within the ambit of the rules of Parliament.

One of the reasons Zuma sent the bill back to Parliament was the lack of adequate public participation.

Budlender argued that opening up the bill to public participation meant that the issues arising from this participation had to be considered by the NCOP.

"Whatever the public produces, the NCOP may consider and deal with," Budlender said. He suggested that the public participation on the bill had been "reasonable".

He said it was up to the NCOP to decide whether it would accept the department’s proposed amendments, which did not emerge from public participation, but it should not reject the so-called "Phakisa" amendments of concern to Opasa.

Lunn urged that the committee "not throw the baby out with the bath water". If the NCOP rejected the department’s amendments on procedural grounds, it should not do the same with the Opasa-supported amendments, which had emerged out of engagements with the department during Operation Phakisa.

He said the agreement reached was a win-win solution for both government and the industry.

Lunn said the amendments were make-or-break for the industry, which needed legislative certainty if it were to invest in costly and risky offshore exploration.

Long delays in getting the legislation on the statute books would act as a deterrent for future investment.

The Onshore Petroleum Association of South Africa supports Opasa’s views.

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