South African oil law changes will deter investment, companies say

Sasol (SSL -1.2%) urges South Africa to say what size stakes it plans to take in new energy ventures under proposed changes to the law as a way to reduce industry opposition.

The chance of commercial success for exploration projects is 10%-30%, and risks and rewards should be shared among all participants, SSL says.

The country's parliament is holding public hearings into amendments that would give the state a holding in new oil and gas projects, a plan that has drawn opposition from companies such as Exxon (XOM) and Shell (RDS.A, RDS.B).

Comments (2)
  • dieuwer
    , contributor
    Comments (2978) | Send Message
    If the South African government wants to take a big chunk of the oil proceeds, they should pay most of the exploration costs as well.
    No free lunch, remember?
    12 Sep 2013, 03:46 PM Reply Like
  • Jonathan Yates
    , contributor
    Comment (1) | Send Message
    This story reinforces what I have long written about in Seeking Alpha and other venues: the superiority of energy assets in North America, particularly Canada. The political stability and national security is far superior. My most recent article was on Seeking Alpha about Americas Petrogas (APEOF.PK), based in Calgary, which just reported increasing net revenues and sales volumes. For another site, I just wrote about Suncor Energy (SU), also headquartered in Canada, which is a major holding of Warren Buffett...'nuff said there!
    I am also preparing another article for Seeking Alpha on Octagon 88 (OTCBB: OTCX), which has soared in value over the last month due to a very positive report on its energy assets in Canada. Energy firms located in Canada have the best of both worlds: protection from the United States, and a pro-production is not Ottawa holding up The Keystone Pipeline, that is for sure!
    12 Sep 2013, 05:03 PM Reply Like
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