Analysing Policy and Regulatory Frameworks for Addressing Climate Change in South Africa's Oil and Gas Industry

Abstract

South Africa’s upstream oil and gas industry currently has a negligible impact on the country’s overall greenhouse gas (GHG) emissions due to its limited production activities which are primarily from Renergen’s Virgina gas operation. Historical emissions were mainly from PetroSA’s Gas Fields (FA; E-M, South Coast Gas and F-O) and Oil Fields (Oribi, Oryx and Sable) all in Block 9 off the South Coast, about 100km from Mossel Bay. Production from these fields ceased in 2020 which further reduced emissions in the sector. The objective of this study was to assess whether the climate change policy framework of South Africa provides sufficiently for the mitigation of carbon dioxide emissions from the upstream petroleum sector while advancing energy security of supply. The study further evaluated carbon dioxide mitigation strategies that are employed by the upstream petroleum industry globally. A qualitative research approach was applied utilising in-depth semi-structured interviews with industry representatives in the oil and gas industry and energy related sectors. A thematic analysis was conducted using Atlas.ti to identify the key trends. In addition, comparative studies from international markets particularly Canada and Norway were analysed to highlight best practices applied in emission reduction within the sector. This study finds that while the upstream petroleum sector has insignificant carbon dioxide emissions, given the current discoveries off the south coast and onshore and the number of active exploration rights currently which are expected to be converted to production rights upon discoveries of oil or gas, the sector could become a significant contributor to the country’s carbon dioxide emissions. The research findings indicate that currently there is a lack of stringent policy and regulatory frameworks, clear emissions reduction targets, and robust carbon pricing mechanisms. As a result, the potential growth of South Africa’s upstream oil and gas activities may conflict with the national climate commitments. Therefore, the integration of international best practices, investment of clean emission reduction strategies and the strengthening of policy and regulatory 9 frameworks can potentially develop the current upstream oil and gas industry to ensure that it aligns with both global sustainability and the domestic energy security objectives required. The research findings highlight the importance of a balanced approach that prioritises emissions transparency, regulatory stability, and long-term climate resilience in shaping the future of South Africa’s oil and gas sector.