BRIAN KANTOR: Clear heads and clean hands needed to capitalise on Total’s oil and gas find
Rent-seeking behaviour should be nipped in the bud as the opportunity has the potential to reboot SA
Exploration for oil or minerals is a very risky activity. And when a significant find is made there is the further risk that the terms allowed to the finder may turn out to be unexpectedly adverse. Indeed, the larger the resource proved, the more adverse these terms are likely to be. Any original successful risk-taker is hostage to the government where the discovery was made. With any potentially valuable discovery under the ground or water, what was essentially unknown will have become much more of a valuable known. Accordingly, the share of the value added allowed to the discoverer can easily become a matter of ex-post negotiation rather than a rule of previously agreed laws. Exploring for oil or gas in deep, turbulent SA waters is surely a particularly risky endeavour. Rules applying to exploration for oil or gas are still to be redrafted and voted upon. Yet despite all this inherent uncertainty — all the known unknowns — Total and its partners went ahead and explored off our coa...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.