Radebe upbeat about SA’s energy prospects

Energy Minister Jeff Radebe is optimistic about the success of his department’s economic empowerment initiatives, geared towards broadening black participation in the energy, oil and gas sectors.

He says his approval last year of purchase contracts with independent power producers (IPPs) signalled government’s determination to transformation.

The investment, which is estimated to cost about R56 billion, is aimed at adding 2,300MW to the struggling Eskom grid.

It has been criticised by labour and left-wing parties, like the recently launched Socialist Revolutionary Workers Party, which maintains that the introduction of IPPs may lead to electricity being expensive in South Africa.

In a speech read by Tseliso Maqubela, the energy department’s deputy director-general for petroleum, Radebe told delegates at the two-day Top Empowerment annual conference in Ekurhuleni he had insisted on increased participation by black-owned companies when he signed the IPP contracts.

On oil, Radebe said the energy department had drafted the Petroleum and Liquid Fuels Sector Codes currently being discussed by key stakeholders.

“The engagements are expected to be very robust, but we are confident that an outcome which effects radical socioeconomic transformation in a disciplined manner will emerge,” he said.

Despite oil prices continuing to rise, Radebe said he was upbeat about the discovery in February of one billion barrels of “wet” gas containing a small amount of oil by French multinational Total off South Africa’s southern coast.

“We remain optimistic that this will encourage other companies to explore for oil and gas on our shores.

“We continue to engage our counterparts on the continent with the view of obtaining crude oil allocations,” he said.

Political instability in Libya and US-imposed sanctions on oil-rich Venezuela and Iran impacted negatively on crude oil prices.

On whether the black economic empowerment policy had made inroads in redressing decades of imbalances created by apartheid, Radebe said: “A clarion call is made in the National Development Plan (NDP) for a bolder approach and clearer targets, including the need to improve the effectiveness of policy instruments aimed at changing ownership patterns.

“This, in our view, is where the mandate for radical approach to socioeconomic transformation emanates from.

“In order to advance economic transformation, we need to give effect to the NDP.”

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The engagement process, said Radebe, addressed the:

• Under-representation of black women, youth and people with disabilities across the petroleum value chain.
• Inadequate operational black involvement.
• Import of crude oil and refined products by black-owned companies and transformation at retail level.

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