Calling it “climate-blind”, an environmental justice group is calling for the withdrawal of the South African National Petroleum Company (SANPC) Bill.
The Bill establishes the South African National Petroleum Company (SANPC) as a single state-owned national champion by merging PetroSA, iGas, and the Strategic Fuel Fund (SFF). Image credit:
Bob Adams from Amanzimtoti, South Africa,
CC BY-SA 2.0, via Wikimedia Commons
According to the Green Connection, which has submitted its request to Parliament, the proposed legislation could deepen South Africa’s dependence on oil and gas, while simultaneously weakening public oversight and exposing taxpayers to major environmental clean-up costs.
The Bill establishes the SANPC as a single state-owned national champion by merging PetroSA, iGas, and the Strategic Fuel Fund (SFF).
This will, says Lisa Makaula, advocacy lead at The Green Connection, make strong oversight, transparency and public accountability essential.
“That level of power is especially concerning because the Bill is climate-blind at precisely the moment when South Africa’s laws and international commitments require climate accountability,” remarks Makaula.
“Climate-blind”
Makaula notes, with concern, that the Bill does not refer to climate change.
Government introduced the Climate Change Act 22 of 2024 to establish a comprehensive system to reduce greenhouse gas emissions, mandate climate adaptation plans for all spheres of government, and drive the country’s just transition to a low-carbon, resilient economy.
“Section 7 of the Act — which came into operation in March 2025 — requires government departments to review and, if necessary, revise, coordinate and harmonise their laws and policies to ensure that the risks of climate change are taken into consideration, and to give effect to the principles and objects of the Act (including climate change mitigation and adaptation),” says Makaula.
“Ignoring climate change in a Bill of this magnitude is not merely an oversight because, fundamentally, it undermines the whole-of-government approach that South Africa has committed to,” she adds.
“By failing to acknowledge the climate crisis, the Bill risks locking the country into long-term fossil fuel infrastructure when public policy should be accelerating a fair shift away from oil and gas.”
Decommissioning and rehabilitation
Makaula also raised concern regarding PetroSA’s legacy decommissioning and rehabilitation liabilities.
She says: “These obligations are estimated to cost around R10bn, yet only about R3bn has reportedly been set aside.
“And since the Bill is contradictory on whether these liabilities will transfer to the new SANPC, along with PetroSA’s valuable rights and assets, or if it will be left behind in an underfunded PetroSA severed from its revenue streams, taxpayers could eventually end up footing these very expensive bills.”
In an April 2024 media statement, the Department of Mineral and Petroleum Resources indicated that to kickstart the operations of the new entity, a “lease and assign model” was being proposed to “strategically select what is leased and assigned to the SANPC by ring-fencing or isolating PetroSA’s legacy assets such as decommissioning liability and current operating challenges of the gas to liquid refinery”.
The Green Connection, however, believes that future oil and gas revenues could bypass the national budget.
The revenue matter
Under the Upstream Petroleum Resources Development Act, the State is entitled to a 20% carried interest in exploration and production rights, managed via a state petroleum entity.
This gives the government a direct stake in production, in addition to standard corporate income taxes and extraction royalties.
According to the organisation, under the Bill, revenue from this stake would flow directly to the new company to fund its operations, rather than being paid into the National Revenue Fund, where Parliament determines how public money is spent.
Therefore, the organisation recommends that any such revenues be paid into the National Revenue Fund or into a transparent, ring-fenced statutory fund dedicated to the just transition, decommissioning, and rehabilitation.
“There are several strong reasons that Parliament should withdraw the SANPC Bill.
“However, if it should proceed, the Bill must be fundamentally amended to protect the public interest, strengthen oversight and ensure that any oil and gas revenues support the just transition – not further fossil fuel expansion,” adds Makaula.
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