The African Energy Chamber (AEC) has applauded the decision by South African President Cyril Ramaphosa to declare a national state of disaster over the country’s electricity crisis but called for “massive” investment and policy reforms to attract investors into the sector.In his State of the Nation Address (SONA) on Thursday night, Ramaphosa also announced the introduction of a new Ministry of Electricity in the Presidency to oversee the revitalisation of state-run power utility’s Eskom’s operations. 

AEC executive chairman NJ Ayuk said although the chamber supported Ramaphosa’s commitment to addressing South Africa’s electricity crisis, “massive reforms from an investment and policy perspective need to be implemented to restore confidence among local, regional and global businesses for them to invest in the country’s energy sector.”

He said the South African government should accelerate the country’s gas agenda “as both a short- and long-term strategy to alleviate the looming electricity crisis.”

Ayuk noted that the sizable potential of new and large-scale gas discoveries across South Africa’s hydrocarbon-rich Orange Basin presented an ideal opportunity for the country to capitalise on this investment momentum and attract interest from international explorers.

He cited the vast potential presented by projects such as Gigajoule’s US$550-million Matola Liquefied Natural Gas (LNG) Project in Mozambique that is expected to supply South Africa with gas; the 865km Rompco Gas Pipeline from Mozambique to South Africa; and Renergen’s Virginia LNG project in South Africa.

“More oil and gas exploration, development and exploitation remains key if South Africa is to achieve energy security and economic growth,” Ayuk said. 

He added: “Government should fast track permit approvals for more drilling, seismic surveys, pipeline developments, as well as for new LNG terminals to be constructed.”

However, efforts to unlock the vast potential presented by the oil and gas sector have been hampered by protests by environmental lobbyists who last year blocked exploitation by Shell to unlock South Africa’s upstream potential.

Ayuk said the AEC, however, believed that more oil and gas exploration was key to ending the electricity crisis, “and as such is strongly advocating for South Africa to create an enabling environment for more oil and gas exploration to take place.”