From left to right: Terry Gale (Exporters Western Cape), Niall Kramer (OPASA), Magali Pailhe (TotalEnergies), Ryan Ravens (Accelerate Cape Town), Dennis Zekveld (Shell) and Gavin Fitzmaurice (Webber Wentzel) at Accelerate Cape Town’s recent CEO Engagement on South Africa’s oil and gas sector.
FROM THE CEO
Last week’s local government elections marked an important moment for South Africa’s municipalities and reinforced the expectations placed on them: responsive leadership, reliable service delivery and the ability to meet the needs of the people and businesses they serve. As new administrations take shape, translating those expectations into action will require collaboration, capability and a clear focus on delivery.
Bringing business, government and other stakeholders together to address issues that will shape the region’s future is central to our role at Accelerate Cape Town. Through continued engagement and structured collaboration, we aim to build a shared understanding of the opportunities and challenges in our region, with a view toward identifying and facilitating practical ways forward.
This was certainly the case this week as we convened key stakeholders to consider the opportunities and potential trade-offs of the Western Cape ocean economy. Offshore energy has enormous potential to contribute to investment and economic development, but its future also raises important questions around environmental responsibility, existing ocean-based industries and coastal communities.
Addressing these considerations requires informed, constructive engagement as we collectively define how we will develop these resources so that the region gains, and no sector is pushed aside.
FOCUS ISSUE
Charting a Common Course: Getting South Africa’s Offshore Energy Opportunity Right
South Africa’s offshore oil and gas resources present significant opportunities for investment, economic development and job creation. For the Western Cape, with its established maritime industries, coastal communities and broader ocean economy, the implications could be far-reaching. Realising this potential, however, will depend on getting the approach right.
This was the focus of our recent CEO Roundtable, ‘Charting a Common Course: Offshore Energy and the Ocean Economy’, hosted in collaboration with the Offshore Petroleum Association of South Africa (OPASA).
A key consideration is that offshore energy cannot be viewed in isolation. Its development has implications for the environment, coastal communities, existing ocean-based industries and the wider regional economy. These interests need to be considered together, with credible information and meaningful engagement informing decisions from the outset.
Previous engagement around offshore exploration has at times struggled to bring these perspectives into the same conversation. There is an opportunity to build on those experiences through a more integrated approach; one that recognises the economic potential, gives legitimate concerns a hearing and considers the responsibilities and safeguards involved.
The roundtable is the first in a series of engagements we will convene to bring business and government together to examine the opportunities presented by South Africa’s offshore basins, consider their broader implications and identify practical next steps for the Western Cape.
Question for members: As this conversation develops, what do you believe needs to be prioritised to ensure that offshore energy opportunities are considered alongside the interests of the wider ocean economy?
MEMBER SPOTLIGHT
Offshore energy: Building Trust, Unlocking Value
Webber Wentzel Partners Candice Meyer and Jonathan Veeran share their thoughts on how offshore energy could deliver for the Western Cape.
The Value of Collaboration
How can early engagement between government, industry and affected communities help build confidence in South Africa’s offshore energy sector?
In their view, confidence rests on three things: investors trusting that projects can realistically go ahead, government being seen to decide fairly and competently, and communities seeing that their voices made a difference. Their suggestions:
- Bring communities, developers and government together before any plan is locked in. Involve many voices, not just one community spokesperson, and keep minutes of what is discussed and agreed.
- Help communities understand what a project could offer them, while being open about what is still unknown.
- Keep promises on jobs, training and supplier opportunities achievable. Give each one an owner and a deadline, report on progress publicly, and be clear about which community projects are voluntary and which the law requires.
- Set up a forum where every level of government, the regulators, port authorities, industry and communities can talk openly and remove bureaucratic blockages, without regulators losing their independence.
- Stay in contact for as long as a project runs. That means a permanent point of contact, a way to raise complaints, shared monitoring and prompt notice of any incidents.
- Treat the ocean as a shared space. Weigh energy projects against fishing, tourism, shipping and conservation to see where they can coexist and how to handle clashes.
Creating the conditions for investment
What needs to be in place to turn South Africa’s offshore energy potential into sustainable economic value for the Western Cape? They suggest:
- Investors must understand the rules: how rights to resources are granted, how any shift between regimes will be handled, ownership and participation requirements, tax terms and the route to approval.
- Approvals should be dependable rather than automatic, with well-staffed regulators, joined-up applications and decisions that arrive on time and come with reasons.
- Projects must make financial sense from discovery onward, with believable costs, funding, access to infrastructure and a market for what’s produced.
- Ports and related infrastructure need the capacity, reliability and completion dates that projects can count on.
- The real gains lie in the services around production. Cape Town’s location makes it well placed to serve clients across neighbouring countries.
- Training should give people credentials employers trust, real workplace experience and skills they can carry into other industries.
- Local firms need help to win contracts: accreditation, sound safety practices, access to funding for day-to-day operations, mentorship and being paid on time.
- Ports, engineering workshops, training centres and research facilities should serve many marine and energy activities, not just one.
- Strong environmental standards should strengthen the investment case. That includes preventing damage, managing emissions, independent oversight, money set aside for decommissioning, and an assessment of emissions over a project’s whole life.
- Progress should be measured publicly: lasting jobs, apprenticeships finished, spending with local suppliers, firms breaking into export markets, infrastructure completed and environmental results.
WHAT WE’RE WATCHING
South Africa’s fuel prices are influenced by international oil prices, rand-dollar volatility and the cost of importing petroleum products. Geopolitical tensions and rising shipping costs add to the pressure, leaving consumers and businesses exposed to global market movements.
The November fuel price adjustment included a temporary levy reduction to help ease this pressure. However, South Africa remains vulnerable to external factors that influence the cost of fuel. For businesses, this has direct implications for transport, logistics and operating costs, highlighting the importance of energy security and supply resilience
NUMBER OF THE WEEK
39%
South Africa now meets only 39% of its domestic fuel demand through local production, down from 78% in 2019. Imports account for the remaining 61%, increasing exposure to global price fluctuations and supply disruptions. This dependence has implications for business costs, competitiveness and the country’s long-term energy security.
Source: BusinessTech – South Africa is producing nearly 40% less fuel than it did seven years ago
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