At least R9.2 billion would be spent on Saldanha Bay in the Western Cape to develop it as an oil and gas hub as part of Operation Phakisa, President Jacob Zuma said yesterday.

In addition, environmental authorisation has been approved for the Burgan Fuel Storage facility in the port of Cape Town.

Zuma said this was an investment of about R660 million and construction would begin by the end of next month.

He said the finalisation of the Minerals and Petroleum Development Amendment Bill, which is currently in the parliamentary process, was designed to assist in accelerating offshore oil and gas exploration.

“The aspiration of the offshore oil and gas exploration focus group of Operation Phakisa is the drilling of 30 exploration wells in 10 years. In their view, this will produce 370 000 barrels of oil per day,” he said.

Methodology
The president was updating the media on the progress made so far in the implementation of Operation Phakisa, a delivery methodology of the National Development Plan.

The government launched Operation Phakisa late last year, starting with the ocean economy. It is part of the nine-point plan contained in February’s State of the Nation address to reignite growth and boost job creation.

An initial study in 2010 by the Nelson Mandela Metropolitan University estimated that the oceans around South Africa have the potential to contribute about R54 billion to the gross domestic product and create 316 000 jobs. Zuma said opportunities were being explored in various areas, one being the repairing of rigs and the servicing of vessels.

About 30 000 vessels passed through South Africa’s waters every year, and 13 000 docked at its ports every year, he said. “South Africa only does maintenance on 5 percent of these vessels. In addition, of the 80 rigs in the Western Cape, only four are serviced per year.”

In addition, 300 million tons of cargo on foreign-owned vessels are shipped and 1.2 million tons of liquid fuel passes along South Africa’s coast.

Zuma said in this regard, significant investment was required in new port infrastructure, including rig repairs.

He also announced the launch of Operation Phakisa segments in mining and basic education.

Differences
In the briefing, Zuma did not even try to gloss over the long-simmering differences between the government and the mining sector, mainly over the implementation of the mining charter, and job losses because of low commodity prices and high costs.

Zuma said a comprehensive consultation process with government departments, the private sector and labour was being implemented as part of Operation Phakisa Mining.

Zuma said an alarming number of companies were loss-making and investment in exploration and extraction had dropped significantly.

“We need to work together to turn this around,” he said.

Mining Phakisa had the objective of building partnerships between the government and key sectors in the mining sector so as to unlock investment and optimise the sector’s positive developmental impacts on the economy and society.

BUSINESS REPORT