By Ajong Mbapndah L
South Africa stands at a pivotal moment in its search for new engines of growth, energy security, and industrial revival. Yet just as global interest in the Orange Basin surges, uncertainty at home — from policy ambiguity to activist-driven litigation — has dampened investor appetite. Against this backdrop, the EnerGeo Alliance commissioned one of the most comprehensive economic analyses to date on South Africa’s upstream potential.
For Nikki Martin, President & CEO of EnerGeo Alliance, the mandate was clear: fill critical knowledge gaps, quantify the real economic value at stake, and offer policymakers evidence-based guidance at a time when South Africa urgently needs new economic drivers. From GDP uplift projections of more than R23 billion annually at Block 11B/12B, to more than 20,000 potential jobs, to regional spillover opportunities linked to Namibia’s discoveries, the report outlines not just the value of an upstream sector — but the cost of inaction.
In this wide-ranging interview, Martin unpacks how the report was built, the lessons drawn from global comparators, and why regulatory clarity and streamlined permitting remain the keystone for unlocking South Africa’s next era of energy-driven growth.
What prompted EnerGeo Alliance to commission this economic analysis on South Africa’s upstream oil and gas potential, and what key knowledge gaps did it seek to address?
As the global trade alliance for the energy geoscience and exploration sector, we support informed regulatory policies that advance responsible energy exploration, production, and operations through science- and data-backed insights and analysis.
We recognized a gap in understanding South Africa’s upstream oil and gas potential that could deliver economic benefits and opportunities. The report is particularly important at a time when the industry in South Africa is facing reduced investment appetite driven by the above ground risk of litigation brought by activists.
The key takeaways should serve as crucial proof points for policymakers and investors in evaluating South Africa’s oil and gas industry’ potential to strengthen energy security, stimulate industrial development, create high-quality jobs, and generate significant fiscal revenue.
Could you walk us through the process of preparing the report — the data sources, case studies, and modeling approaches used to quantify economic benefits across the different phases of development?
The report explores the economic benefits of upstream oil and gas development over its entire lifecycle, spanning exploration, appraisal, development, production, and closure. It assesses both fiscal revenue for government and non-revenue benefits for government and communities.
The analysis acknowledges the existing economic pressures in South Africa, and provides early estimates of economic benefits and opportunities, including potential GDP contributions and employment creation.
It also examines case studies from three countries, each of which are at different stages of upstream oil and gas development: Namibia is currently an emerging frontier, Suriname is undergoing rapid development, and Ghana is an experienced producer. Each of these case studies offers valuable insights into the opportunities and challenges involved in the upstream oil and gas sector.
The report highlights that projects like Brulpadda and Luiperd could add over R23 billion annually to South Africa’s GDP. What broader lessons did you uncover about the potential scale of fiscal and employment impacts?
South Africa is currently experiencing a prolonged period of economic stagnation, characterized by slow GDP growth, declining investment, a contracting productive base due to de-industrialization, and persistently high unemployment. This underscores the urgent need for new economic drivers.
The Block 11B/12B project alone is estimated to be capable of boosting South Africa’s annual GDP by almost R23 billion, and create over 20,000 jobs. The Brulpadda and Luiperd project could contribute, on average, an additional R8.6 billion annually to the fiscus in taxes. A robust upstream oil and gas sector can drive growth throughout the economy and creating extensive industrial linkages, stimulating growth in manufacturing, heavy construction, transportation, and other specialized services.
We have seen this around the world. In the United States, for example, it contributes nearly 8% to national GDP. Governments directly derive revenue from the upstream sector through combination of royalties, corporate income tax, and sometimes a resource rent tax. The industry demands a wide range of technical skills, and provides opportunities for human capital development through internships and entry-level jobs.
How would you assess the South African government’s current level of commitment to translating these findings into policy action — especially regarding regulatory clarity, infrastructure investment, and local content implementation?
The oil and gas industry has an open and engaging relationship with key departments in South Africa.
The report has been well received by members of government and industry in South Africa. We welcome the regular stakeholder workshops to better understand the needs and concerns of the industry, and to address them. We recently participated in the consultation on the draft regulations to the Upstream Petroleum Resources Development Act published by the South African Department of Mineral and Petroleum Resources.
In our comments, we highlighted the need for clarity and transparency in permitting timelines while advocating for thorough environmental impact analyses and stakeholder consultations. These elements are crucial for fostering investment confidence and supporting the country’s economic development.
We believe the South African government is committed to securing investment into the economy, including in oil and gas.
Given the country’s chronic loadshedding and dependence on imports, how could developing a robust upstream oil and gas sector practically alleviate the national energy deficit and strengthen energy security?
There is an urgent need in South Africa to maintain a stable and continuous energy supply. With the country’s high dependence on imports of refined and crude oil and natural gas, developing a domestic upstream oil and gas industry will significantly enhance South Africa’s national energy security by reducing reliance on volatile foreign fuel supplies. Furthermore, a reduction in import dependency will have a direct positive impact on the country’s balance of payments and helps conserve foreign exchange reserves.
The report identifies significant synergies between South Africa’s Orange Basin and Namibia’s discoveries. How can South Africa position itself as a regional hub for upstream logistics and services to capture spillover economic benefits?
Developing Namibia’s fields will demand a comprehensive support ecosystem. While the country is beginning to develop local support services, particularly around the Port of Walvis Bay, it will not be enough to support a multi-decade, multi-billion-barrel development program. With this in mind, South Africa has a strategic opportunity to leverage its advanced industrial base and world-class port infrastructure, particularly the Saldanha Bay, to position itself as a key logistical and industrial hub for the entire Orange Basin.
Capitalizing on the South Africa existing industrial base and port infrastructure lead to job creation and industrial development, in turn allowing the nation to capture economic value. The same support infrastructure could also service prospective South African developments down the road.
Critics often raise environmental and climate-policy concerns around new hydrocarbon development. How does EnerGeo propose balancing these imperatives with the need for economic growth and energy security?
Natural gas offers a pragmatic pathway to reduce emissions while maintaining energy reliability. It produces significantly fewer emissions than more carbon-intensive sources and provides an efficient way to support economic development and help lift communities out of poverty.
Importantly, relying on domestic gas rather than imported gas or oil offers greater stability and reliability, shielding South Africa’s energy system from geopolitical and currency risks. By leveraging natural gas as a transitional resource, the country can strengthen energy security and make measurable progress toward lowering emissions without compromising its economic growth objectives.
What non-revenue benefits — such as job creation, infrastructure, and local enterprise development — stand out as the most transformative for South African communities if upstream projects advance?
Beyond generating significant fiscal revenue, upstream projects could provide South Africa with a significant opportunity to create high-quality jobs, strengthen energy security, and stimulate industrial development. These benefits will be felt outside of major urban centers, and in coastal and rural communities.
First and foremost, the Block 11B/12B project alone has the potential to create over 20,000 direct, indirect, and induced jobs. Roughly a quarter of the 2,420 direct jobs are expected to be in manufacturing. As the industry requires a diverse range of specialized skills, there will be opportunities for human capital development. The high demand for these specialized technical and soft skills will ultimately lead to high-value job creation and more equitable distribution of economic benefits.
Second, developing a domestic upstream industry will significantly reduce South Africa’s reliance on volatile foreign fuel supplies. Right now, South Africa relies heavily on imported crude oil and refined petroleum products, in turn exposing the country to global price volatility and logistical risks.
With regards to local enterprise development, development of the upstream oil and gas sector is expected to foster extensive industrial linkages, stimulating growth in manufacturing, heavy construction, transportation, and specialized services.
Beyond South Africa, EnerGeo has been active in several African markets. Could you highlight some of your organization’s 2025 initiatives on the continent, and how they align with supporting responsible upstream development?
Throughout Africa, EnerGeo Alliance is actively advocating for the role of natural gas and oil in meeting growing energy demand and ensuring access to reliable and affordable energy. Last year, in collaboration with Eye4Business, we published the report “Energising South Africa,” which emphasizes the critical importance of natural gas for the country’s growth. Geoscience plays a vital role in the development of this energy source, providing essential data for identifying reserves and minimizing exploration risks.
Another important area of work for EnerGeo is ensuring smooth permitting processes for geoscience and exploration operations across the continent.
What are the next steps following this report — both for EnerGeo Alliance and for policymakers — and what prospects or milestones should we expect in 2026 as Africa’s upstream sector evolves?
EnerGeo Alliance strongly believes that an efficient and streamlined permitting process, characterized by clear regulations and defined timeframes, is one of the most critical factors in attracting investments. Looking ahead to 2026, we are eager to collaborate with regulators to share our insights, offer our expertise in facilitating a smoother permitting process, and partner with the governments and local communities to build a secure and reliable energy future.
**Culled from December Issue of PAV Magazine
