South Africa Oil & Gas Report Q3 2016 - New Study Released

From: Fast Market Research, Inc.
Published: Tue Jul 19 2016

Major planned overhaul s of the country's regulatory and fiscal regimes are a broad positive for the South African oil and gas sector. However, the pace of reform will likely remain slow and we see limited upside to the upstream sector over the short to medium term. As such, and despite relatively moderate oil consumption growth, domestic production will struggle to keep pace with demand driving a higher dependence on imports over the 10-year forecast period. Our outlook on the downstream segment is heavily bearish, due to ageing and poorly efficient refining capacity, weak profitability and limited appetite for investment.

Latest Updates & Key Trends:

The government has announced plans to reform legislation covering its oil and gas sector. Key reforms include the separation of oil and gas from mining laws, an increased role for the Department of Energy and the division of policies governing the upstream, midstream and downstream sectors.

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While the reforms are broadly positive, replacing the amended Mineral and Petroleum Resources Development Act, progress is liable to be slow and we do not expect major investment to return to the market over the short term.

Refining capacity will remain severely underutilised, as South African retailers opt for increasingly competitive refined fuel imports above domestic output. Globally, South African refiners are at a major disadvantage, due to a lack of domestic crude production, ageing infrastructure, inflated wage costs and frequent power outages.

Fuels consumption growth will remain relatively subdued, as high inflation and a weak currency weighs on consumer spending, whilst a poor macroeconomic outlook dulls demand in the domestic power and industrial sectors.

Gas demand will remain constrained, due to low domestic production growth and a continued lack of import alternatives. However, the government's Gas To Power Programme and linked LNG import facilities offer upside to both imports and consumption.

The South Africa Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for South Africa including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's South Africa Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the South African oil and gas industry.

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