3 February 2020 by and Oil & Gas Alert

An update on the moratorium on the granting of Reconnaissance Permits, Technical Co-operation Permits, Exploration Rights and Production Rights

On 28 June 2018, Samson Gwede Mantashe, Minister of Mineral Resources and Energy, having regard to the national interest and the need to promote the sustainable development of the nation’s petroleum resources, imposed a moratorium, under section 49(1) of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) on the granting of applications for Technical Co-operation Permits, Exploration Rights and Production Rights through the publication of a notice in the Government Gazette (Notice). The moratorium, however, did not affect the processing of applications for Reconnaissance Permits, Technical Co-operation Permits, Exploration Rights and Production Rights received prior to the date of publication of the Notice.

On 20 December 2019, just prior to the publishing of the Upstream Petroleum Resources Development Bill for public comment on 24 December 2019, the Minister, having reconsidered the circumstances which caused the publication of the Notice, lifted the moratorium on the granting of applications for Technical Co-operation Permits, Exploration Rights and Production Rights in respect of certain onshore areas, in terms of section 49(3)(a) of the MPRDA.

Ultimately, the upliftment does not:

  1. apply to offshore areas or areas subject to the Notice of Restriction No 71, dated 3 February 2014, which are predominantly in the Karoo area; and
  2. affect exclusive rights conferred on holders of Technical Co-operation Permits and Exploration Rights to apply for Exploration Rights and Production Rights, as the case may be, in terms of sections 78(1) and 82(1)(a) of the MPRDA respectively.

Importantly, any application for an Exploration Right and/or a Production Right shall not authorise the holder of such right to undertake hydraulic fracturing until an appropriate regulatory/legislative framework has been promulgated.

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