[miningmx.com] – AMENDMENTS to the Mineral and Petroleum Resources Development Act (MPRDA) would cost South Africa billions as the country’s government stands to take a 20% free-carry in new oil and gas projects, analysts told Business Times, a weekly business newspaper.
An estimated $1bn might be spent on oil and gas exploration, said Business Times citing a report by PwC – investment that might now be shelved after the national assembly last week approved the MPRDA Amendment Bill.
“Say you’re an exploration company drilling deep-sea for oil — you’re looking at $100m to $200m per well, and that is no guarantee you will find anything,” an analyst said. “There were 21 attempts in the North Sea before they struck oil. This is a huge risk the company is taking — yet you have to give away 20% to the state. There is also uncertainty about the black shareholding requirement on top of that,” he said.
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