South Africa can learn from Angola’s upstream sector revival, says AEC

South Africa has laid much of the legal and institutional groundwork needed to develop its oil and gas sector, but the real challenge is turning those reforms into sustained investment, according to the African Energy Chamber (AEC).

In a media statement on July 3, the AEC said Angola’s experience showed that passing new legislation alone is not enough. Long-term success depends on implementing reforms consistently, providing regulatory certainty and maintaining investor confidence.

According to the Chamber, South Africa has made significant progress in recent years. The Upstream Petroleum Resources Development Act (UPRDA), which came into force in late 2024, created a single framework for upstream licensing and introduced a mandatory 20% carried state interest in petroleum projects.

In May 2025, the government established the South African National Petroleum Company (SANPC) by consolidating three state-owned subsidiaries of the Central Energy Fund – PetroSA, iGas and the Strategic Fuel Fund – into a single state-owned national oil company. Later that year, it also lifted a 13-year moratorium on shale gas exploration in the Karoo Basin, which is estimated to contain up to 300 trillion cubic feet (about 8.5 trillion cubic metres) of shale gas resources.

Despite these advances, the AEC says implementation remains the key test. Environmental court challenges have delayed offshore exploration by TotalEnergies (EPA/NYSE/LSE: TTE) and Shell (LSE/NYSE: SHEL) since 2022. In August 2025, the Western Cape High Court cancelled the environmental authorisation for offshore Block 5/6/7 off the southwest coast.

Meanwhile, the massive Brulpadda and Luiperd gas-condensate discoveries in the Outeniqua Basin remain undeveloped, despite an FTI Consulting study estimating they could add up to ZAR25bn (about $1.5bn) a year to South Africa’s balance of payments.

Reforms introduced under President João Lourenço have improved the investment climate by separating regulatory and commercial responsibilities and streamlining licensing procedures. The creation of ANPG in 2019 as an independent concessionaire has increased transparency and encouraged companies to reconsider opportunities in Angola’s offshore sector.

The AEC believes that Angola’s upstream sector revival provides a useful example of how effective implementation can attract investment. After launching wide-ranging reforms in 2017, Angola also introduced new legislation for the gas sector and adopted measures to extend the life of mature oilfields. These changes have helped restore investor confidence and have supported production of more than one million barrels per day (bpd) and attracted around $70bn in planned upstream investment.

“Angola’s regulatory reforms demonstrate that political will, matched with clear fiscal and legal frameworks, can transform an upstream sector within a single policy cycle. These reforms offer critical lessons for countries such as South Africa, which has the opportunity to be a first-mover in establishing a strong regulatory environment,” said AEC’s executive chairman NJ Ayuk.

South Africa has already established the foundations for an upstream industry through the UPRDA, SANPC and the lifting of the Karoo moratorium. According to the AEC, the pace and consistency with which these reforms are implemented will determine whether the country can capitalise on growing exploration interest in southern Africa’s offshore basins.