Regulation of the upstream petroleum industry. A comparative analysis and evaluation of the regulatory frameworks of South Africa and Namibia
Controversy surrounds the upstream petroleum industry. Although the benefit of petroleum resources is beyond dispute, the exploitation of petroleum resources comes at a price, as history has shown time and again. Not only does petroleum exploitation have detrimental effects on the environment, but host countries often are worse off than countries with little or no petroleum resources. This "resource curse" is partially the result of flawed regulatory frameworks for petroleum resource extraction in host countries. This thesis identifies three elements that must be present in a country's regulatory framework for petroleum extraction if the resource curse phenomenon is to be avoided and benefit s from petroleum are to be maximised. These elements are: transparency, accountability and a balance of interests between the petroleum companies and the host nation. Namibia and South Africa are not yet major players in the international upstream petroleum industry. There is accordingly not much academic engagement with petroleum law in these two jurisdictions. The courts have also not yet had the opportunity to scrutinise the legislation regulating the upstream petroleum industries of South Africa and Namibia. There are, however, indications that both countries may possess viable quantities of petroleum resources. In anticipation of the possibility of finding commercially viable quantities of petroleum, South Africa and Namibia have enacted legislation to regulate the upstream petroleum industry, but the efficiency of the legislation, specifically how it reflects the elements of transparency, accountability and balance of interest, have not yet been considered. The research for this thesis is driven by the question of how the regulatory framework for petroleum exploitation in South Africa and Namibia embraces the elements of transparency, accountability and balance of interest. The purpose of this thesis is to examine the regulatory frameworks for upstream petroleum resources in South Africa and Namibia in anticipation of the demands that will be placed on law as the sectors grow. In doing so, this thesis scrutinises the legislation in South Africa and Namibia to determine the extent to which the three crucial elements of transparency, accountability and balance of interest between the petroleum company and the host nation are reflected in the regulatory frameworks for petroleum resources.
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