Businessweek: Shell Delays South Africa Basin-Drilling Plan Due to Law Doubt

Royal Dutch Shell Plc (RDSA), Europe’s largest oil producer, may drill South Africa’s northwest coast two years later than planned because of regulatory uncertainty.

“It is very difficult to go my bosses in the Hague and say I suggest we drill a well but I don’t know exactly what the rules and regulations are,” Jan Willem Eggink, general manager for upstream at Shell’s South African unit, told reporters in Cape Town. Drilling that was anticipated to start this year may take place in 2016, he said.

Shell, Exxon Mobil Corp. and Anadarko Petroleum Corp. are among the companies that have objected to proposed changes to South Africa’s 2002 Mineral and Petroleum Resources Development Act on the grounds that they are too vague and will undermine investment. The amendments include giving the state the right to a free 20 percent stake in all new energy ventures and to buy an unspecified additional share at an agreed price.
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