South Africa Halts Oil Exploration Permits to Revamp Licensing

(Bloomberg) -- South Africa’s Department of Mineral Resources has issued a moratorium on new applications for petroleum exploration and development in order to change its licensing process.

The restriction won’t affect applications received before the date of publication of the notice, which appeared in the online version of the Government Gazette on June 28 and was signed by Minister Gwede Mantashe.

The restriction “is primarily aimed at using licensing as a tool to achieve the transformation ideal” and fast-track exploration, Petroleum Agency South Africa, the country’s oil and gas regulator, said in a statement cited by the department. The ruling African National Congress has implemented legislation aimed at redistributing the country’s mineral wealth more equally among South Africans to make up for racial discrimination during apartheid.

Royal Dutch Shell Plc last year relinquished a license to search for oil off South Africa due to legislative uncertainty. Other companies with permits in the country’s mostly unexplored offshore have diluted work programs as they wait for greater clarity.

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