Upstream Petroleum Industry
Representative Image Grant Durr/Unsplash

Nobuhle Nkabane, deputy minister of mineral resources and energy of South Africa, is optimistic that a breakthrough in the development of the upstream petroleum industry in the country can help improve its economy.

Speaking at the inaugural Energy Conference hosted by the South African National Energy Development Institute (SANEDI) in Johannesburg on Tuesday, Nkabane said a milestone as such "will catapult our economy to greater heights."

She also welcomed the Parliament's approval of the Upstream Petroleum Resources Development [UPRD] Bill, which "seeks to separate petroleum provisions from mineral provisions and address issues that are pertinent to the upstream petroleum sector," SA news reported.

Nkabane mentioned an African Energy Chamber report that predicted gas demand will increase and South Africa can grab this opportunity to tap the market.

"In view of the [chamber's] prediction, the approval of the UPRD Bill is indeed a major step towards the immediate development of South Africa's Upstream Petroleum Industry which will enable our country to become a major player in the production and supply of oil and gas," she said.

The deputy minister insisted that this is the best time for South Africa to "invest in the exploration and exploitation of the natural resources that it is well endowed with, including oil and gas."

She went on to say that to address the triple challenges of poverty, unemployment and inequality, the country requires a "more rapid and inclusive economic growth which will need all energy technologies to play a significant role," adding that a developing nation like South Africa doesn't have the "luxury to choose between these energy technologies."

The deputy minister noted that the department appreciates any transition to a low-carbon future, as it will have an impact on the use of fossil fuels.

"However, in view of the fact that 82% of energy sources in the world are from fossil fuels, this conference must help us determine how best South Africa can manage its transition, given its endowment with these fossil fuels," she continued.

Nkabane further emphasized that the National Development Plan 2030, which was drafted in August 2012, will encourage the government to implement mixed energy sources to diversify South Africa's energy mix to meet the country's growing electricity demand.

Mixed energy sources include solar PV, wind, coal, nuclear, gas, hydro and battery storage. According to the deputy minister, these sources provide South Africa an opportunity to produce off-grid electricity, as well as "baseload energy which is essential for industrialization."