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South Africa is at a vantage point to grow its economy by at least 5% or 8% through its oil and gas resources. According to the Minister for the Department of Mineral and Petroleum Resources, Mr Gwede Mantashe, more international companies are showing interest in South Africa’s energy resources.
The world is at juncture whereby there is a shift from fossil fuels to renewable energy; however, according to the minister, Southern Africa still has an opportunity to increase its revenue from its oil, gas and coal, thereby creating jobs and eradicate poverty in Africa.
Mantashe told the 4th Southern African oil and Gas Conference that was held in Cape Town on 19 March 2025, that the exploration, extraction and monetising of indigenous oil and gas resources could be a game changer for South Africa that will bring more revenue to its fiscus, and eliminate the need to consider raising taxes.
This comes at the backdrop that South Africa is currently facing VAT increase, which has divided the Government of National Unity (GNU), and it seems the budget speech that proposed the increment might not pass in parliament come 2 April 2025.
“South Africa is endowed with an abundance of energy sources which need to be commercialized to drive inclusive economic growth, job creation and development. Gas and oil have played second fiddle to other energy sources for far too long in our country and on the continent. This has often resulted in foreign NGO’s wanting to veto development. This is not correct as we see how these energy sources continue to drive development and industrialization elsewhere.
The main focus has primarily been on renewables. While we diversify our energy sources to future-proof our development, we will aggressively pursue oil and gas, coal and renewables.
The country needs secure supply of diverse energy sources. As government we are committed to a mix of energy sources that will enable and accelerate development in country. As we reported previously, the last decade has seen increased interest in South Africa’s oil and gas blocks, and gas companies are acquiring new geophysical data, in-depth basin analysis, and to a lesser extent drilling of exploration wells. We’re encouraged by companies which continue to drill exploration wells. Such bold risk-taking and investment will be rewarded,” said Gwede Mantashe.
He said major discoveries off the coast of Namibia that extend southwards into South African waters have shown that the region has substantial unexplored reserves and has drawn great interest from major petroleum companies.
According to the Minister, TotalEnergies, Shell and Galp have made eight discoveries across three blocks in Namibia’s Orange Basin, representing an estimated 3.5 billion barrels of potentially recoverable oil.
“The South African government wants accelerated oil exploration in the country’s waters, we believe developing the country’s oil and gas resources could boost the country’s economic growth rate to 5% and possibly 8%. Government took a decision to rationalise some of our State-Owned Entities (SOEs) to form the South African National Petroleum Company (SANPC).
The SANPC is a strategic intervention by government to create a state-owned national company to actively pursue oil and gas projects. Considering the increased global demand for natural gas, government has moved with speed to finalize the Gas Master Plan to achieve a stable and growing economy,” he said.
“The Gas Master Plan is designed to complement existing energy policies and contribute to an integrated energy planning approach for the country as outlined in the updated Integrated Resources Plan. It provides a framework for the role of natural gas in the energy mix and gives policy direction to industry.
Its objective is to ensure that Government is able to diversify supply options from local and international markets. Furthermore, to facilitate the development an efficient, competitive and responsive energy infrastructure network such as gas storage facilities, liquefied natural gas import facilities, pipeline networks and regasification plants. Through this, the Plan would also enhance localisation, create jobs and enable inclusive economic growth,” he continued.
“We have also noticed that Europe is looking to Africa to diversify its gas supplies. While this presents an opportunity to earn foreign revenue, we should ensure that we do not export our gas at the expense of domestic and regional markets. It is imperative for SADC countries to be resolute in their efforts to unlock oil and gas exploration and development. This further presents SADC countries with an opportunity to determine conditions that will alleviate global oil and gas prices by developing their own resources.
There must be a concerted effort among African nations to ensure that the oil and gas sector grows and thrives through investments in the upstream development for the economic prosperity of our nations.
The need to accelerate the exploration of oil and gas both onshore and offshore is urgent to reduce South Africa’s dependency on foreign oil and mitigate the risk caused by geopolitical tensions that threatens the country’s security of energy supply,” he concluded.
