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BMI View: Major planned overhauls of the country's regulatory and fiscal regimes are a broad positive for
the South African oil and gas sector. However, the pace of reform remains slow, limiting the upside to the
upstream sector over the short to medium term. As a result, despite relatively moderate oil consumption
growth, domestic production will struggle to keep pace with demand, driving a higher dependence on
imports. Our outlook on the downstream segment remains heavily bearish, mainly due to ageing and poorly
efficient refining capacity, weak profitability and limited appetite for investment.
Latest Updates & Key Trends:
? While South Africa does not have a vast proven conventional hydrocarbons reserve base, it holds a
substantial offshore and unconventional potential. However, exploration remains heavily constrained by
regulatory uncertainties and bureaucratic delay. During 2016-2025, oil reserves will see a 59.4% decline
to 5.6mn bbl, while gas reserves are expected to contract by 91.4% to just 2.4bcm.
South Africa will remain a small producer of oil. Crude oil and lease condensates output is set to peak at
6,140b/d in 2019, before falling back to 5,300b/d in 2025. Other liquids production is forecast to increase
from 141,400b/d in 2015 to 156,200b/d over the same period.