Moneyweb: Gas and oil sector optimism premature

Detractors of the Minerals and Petroleum Resources Development Amendment Bill (MPRDA) should not get too excited about the fact that President Jacob Zuma has sent it back to the National Assembly, analysts say.

Zuma sent the bill back last Friday on grounds that it would not pass constitutional muster. However while parliament will now have to review the piece of legislation it passed last March, this would be restricted to specific constitutional points of contention and is unlikely to deal with industry concerns.

Some of the optimism regarding Zuma’s rejection of the bill is misplaced, says Mike Davies, director of Kigoda Consulting. “I think the optimism is largely around the oil and gas sectors, and that’s where there is potential for further frustration,” he says. “[Department of Mineral Resources] Minister Ngoako Ramatlhodi had previously suggested the creation a separate regime for oil and gas, but I don’t think that’s going to happen in the short term.
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