South Africa’s Minister of Mineral Resources and Energy, Gwede Mantashe, has unveiled a new Black Economic Empowerment (BEE) framework aimed at reshaping the country’s oil and gas exploration landscape to ensure equitable wealth distribution.
The comprehensive blueprint mandates that companies seeking exploration licenses must actively contribute to poverty alleviation and provide adequate housing for their employees.
According to Mantashe, the updated quota system will now be a core requirement in the evaluation and awarding of oil and gas exploration rights.
The goal is to ensure that South Africa’s hydrocarbon sector becomes a tool for inclusive growth and delivers measurable socio-economic benefits to historically disadvantaged communities.
Under the new policy, empowerment criteria will take centre stage in license approvals.
The South African government aims to shift the focus from profit-driven resource extraction to community-centred development, ensuring that oil and gas activities support long-term local transformation.
Although South Africa has limited proven oil and gas reserves, it is ramping up offshore exploration efforts to enhance energy security and reduce reliance on petroleum imports.
The country remains heavily dependent on a robust coal sector, which accounts for a significant portion of its energy mix.
While the renewable energy sector is growing, the government has not announced a full transition away from fossil fuels.
In a recent setback, global energy giant Shell revealed plans to exit South Africa’s downstream sector, following a strategic review of its operations in the country.
Meanwhile, state-owned oil firm Sasol has been grappling with falling profits due to rising operational costs and dwindling gas reserves in neighbouring Mozambique.
The BEE policy, first introduced in 2003, is designed to redress the socio-economic imbalances created during apartheid by promoting the participation of Black South Africans.
The policy requires that Black South Africans—including Africans, Coloureds, and Indians—own at least 30% of enterprises operating in key sectors like oil and gas.
Despite its good intentions, the BEE policy has faced criticism over the years.
Analysts argue that the preferential procurement model may not always result in sustainable economic empowerment.
In 2021, President Cyril Ramaphosa pledged a review of BEE-related policies to ensure they are not misused for corrupt practices and remain fit for purpose.
The new oil and gas BEE framework is expected to attract socially responsible investment while strengthening the economic fabric of communities in exploration zones, the minister added.
