South Africa’s UPRD Act: Can Legal Certainty Revive Major Investment After IOCs’ Exit?

The high‑profile exit of global energy major TotalEnergies from deepwater Blocks 11B/12B and 5/6/7 – home to the Brulpadda and Luiperd gas discoveries – was a significant setback for South Africa’s plans to use domestic resources to boost energy security and economic growth. TotalEnergies, together with partners QatarEnergy and CNR International, gave up their stakes after determining that the discoveries could not be commercially developed under the existing market conditions and regulatory framework.

The exits underscored long‑standing industry frustrations with South Africa’s legal and regulatory environment, widely seen as lacking the clarity and predictability that deepwater investors demand. That backdrop helps explain the government’s passage of the Upstream Petroleum Resources Development Act (UPRD Act) – a standalone legislative framework designed to replace the petroleum provisions embedded in the old Mineral and Petroleum Resources Development Act and provide a bespoke upstream regime.

At its core, the UPRD Act aims to accelerate exploration and production of South Africa’s petroleum resources by providing clear rules and stable rights for companies – key to attracting major investment. It combines exploration and production rights into a single petroleum right, sets out controlled licensing rounds, guarantees third-party access to infrastructure, and establishes the Petroleum Agency of South Africa as a clear regulatory authority. The law also promotes active participation by the State and previously disadvantaged South Africans, mandates local content, allows a share of output to be sold for strategic stock purposes, and separates oil and gas regulation from mining rules to reduce red tape and simplify operations.

Yet the big question remains: will this new legal certainty be enough to lure back the supermajors, or has the landscape shifted toward leaner, more aggressive independent companies seeking opportunities where majors have stepped away?

“Simply put, TotalEnergies’ exit was a blow to South Africa’s energy industry. These discoveries brought to light alternative energy solutions for a country plagued with a decade‑long energy crisis. However, without clear, predictable rules, even world‑class discoveries struggle to progress to commercial development. It shows how regulatory reform is essential to restoring investor confidence,” states NJ Ayuk, Executive Chairman of the African Energy Chamber.

The UPRD Act now provides that framework, but timing is crucial. The regulations needed to put the Act into practice are still being finalized, and until these rules – covering licensing, environmental safeguards and rights administration – are published and tested in early rounds, investor confidence is likely to remain cautious.

For supermajors, investment decisions are increasingly guided by a global strategy that prioritizes projects with clearer returns and lower regulatory risk. With growing pressure to meet climate targets and streamline their portfolios amid the energy transition, deepwater frontier projects in emerging markets are less appealing unless they come with clear, predictable terms.

This creates an opening for independent and smaller players. Companies like Africa Energy Corp. – which increased its stake in Block 11B/12B after the majors’ exit – could view South Africa’s upstream sector as a promising opportunity. With leaner cost structures and a greater tolerance for frontier risk, these players can advance projects that supermajors may avoid, potentially driving local value creation and technology transfer through a different investment model.

Looking ahead to African Energy Week (AEW) 2026 – the continent’s premier energy summit bringing together governments, investors and service companies – the UPRD Act is expected to be a central topic in discussions surrounding South Africa. AEW offers a high‑profile platform to showcase the country’s evolving policy landscape and could set the stage for the first post‑Act licensing round. Industry leaders are likely to debate whether the framework delivers on its promise of stability and what conditions might be needed to attract supermajors back.

Ultimately, South Africa’s upstream rebound will depend on execution: if the regulations foster transparency, competitive terms and confidence in governance, the UPRD Act could be a turning point. If not, the sector may settle into a new normal where ambitious independents, rather than supermajors, drive the next chapter of oil and gas development.

Per Kind Favour of APO

Africa Fact: The Ethiopian city of Axum has a series of 7 giant obelisks that date from perhaps 300 BC to 300 AD. They have details carved into them that represent windows and doorways of several storeys. The largest obelisk, now fallen, is in fact “the largest monolith ever made anywhere in the world”. It is 108 feet long, weighs a staggering 500 tons, and represents a thirteen-storey building.