This Act, comprising 111 sections, seeks to (i) affirm the State’s sovereign rights over all petroleum resources within the Republic; (ii) give effect to the State’s custodianship of these resources; (iii) promote equitable access to petroleum resources for all South Africans; (iv) expand opportunities for black persons to participate in and benefit from the upstream petroleum sector; (v) ensure fair access to the nation’s petroleum resources; (vi) support local employment, skills development, technology transfer and national industry participation; (vii) stimulate economic growth and petroleum resource development; (viii) advance the social and economic welfare of all South Africans; (ix) secure tenure for exploration and production operations; (x) ensure ecologically sustainable development of petroleum resources alongside justifiable social and economic progress; (xi) accelerate exploration and production to maximise economic recovery for national benefit; (xii) establish a framework for third-party access to upstream petroleum infrastructure; and (xiii) promote the acquisition of petroleum geo-technical data.
In Chapter 3, the administration of the Act is assigned to the Petroleum Agency of South Africa (PASA), which is designated as the regulatory authority for the upstream petroleum sector. Its main functions include (i) managing data; (ii) receiving applications; (iii) enforcement; (iv) health and safety oversight; (v) advising the Minister. The Act introduces a structured licensing system for petroleum exploration and production, including (i) competitive administrative licensing rounds (petroleum rights, reconnaissance permits); (ii) detailed criteria for acceptance, evaluation, or rejection of applications; (iii) mandatory public consultation for all applications; (iv) establishment of the Petroleum Development and Environmental Committee for technical and environmental oversight. Regarding the permits, the Act provides 3 main authorisations (1) Reconnaissance Permits, (2) Petroleum Rights, and (3) Retention Permits, each with distinct processes, durations, rights, obligations, and transfer conditions. A Reconnaissance Permit allows only seismic or geophysical data acquisition (no drilling) and may be applied for at any time. A Petroleum Right is the central right under the Act and covers exploration, appraisal, development, and production through regulated phases. PASA accepts applications only if there are no overlapping rights and all requirements are met. A Retention Permit allows a petroleum right holder to defer development when a discovery (especially of gas) is proven but not yet commercially viable. It may be applied for when market conditions or ongoing gas market development studies do not justify immediate development, and the application must include detailed gas market studies, economic assessments, and a proposed work programme. The permit is granted if the holder has complied with all obligations under the petroleum right, the discovery is technically proven, and the studies and market conditions support postponement of development. Finally, the Act empowers the State to require petroleum right holders to sell a portion of their production for the purpose of maintaining national strategic petroleum reserves. It also establishes a regulated framework for third-party access to upstream pipelines and processing facilities, with access tariffs determined by PASA. In addition, all activities under the Act are subject to environmental authorisation, and PASA is responsible for issuing health and safety guidelines and monitoring compliance, operating alongside the environmental and water-use oversight frameworks.