South Africa’s upstream law targets investment revival after supermajor exits

South Africa is seeking to revive upstream investment with the introduction of its new Upstream Petroleum Resources Development Act (UPRD Act), a standalone legal framework designed to provide greater regulatory clarity and attract exploration and development activity after recent exits by major international operators.

According to African Energy Chamber, the legislation follows the withdrawal of several international oil companies from key offshore gas discoveries, including Blocks 11B/12B and 5/6/7, where earlier finds such as Brulpadda and Luiperd had been viewed as potential catalysts for domestic energy development. Those exits highlighted longstanding concerns about regulatory uncertainty, commercial terms and market conditions that have complicated project advancement in the country’s offshore sector.

The UPRD Act is intended to address those issues by establishing a dedicated upstream regulatory regime separate from mining legislation, with clearer rules governing licensing, fiscal terms and development rights. The framework combines exploration and production rights into a single petroleum right, introduces structured licensing rounds and provides provisions for third-party infrastructure access, while designating the Petroleum Agency of South Africa as the primary regulator.

The law also formalizes state participation requirements and local content provisions, while seeking to streamline permitting and operational approvals. Officials and industry observers view these measures as key to restoring investor confidence and improving the competitiveness of South Africa’s upstream sector.

However, the effectiveness of the new framework will depend on implementation. Detailed regulations governing licensing procedures, environmental approvals and operational requirements are still being finalized, and industry participants are expected to watch closely as the first licensing rounds under the new regime are introduced.

While the clearer regulatory structure could encourage renewed interest from international investors, many large operators are prioritizing projects with lower regulatory risk and faster returns. That shift may open the door for smaller independent companies with higher risk tolerance to advance exploration and development opportunities in South Africa’s frontier basins.

Industry analysts note that if the new regulatory regime delivers predictable terms and efficient approvals, the UPRD Act could help reposition South Africa as an emerging upstream investment destination. If uncertainty persists, however, future activity may be driven primarily by independents rather than major international operators.