On 3 June 2015 the South African Minister of Mineral Resources gazetted the Regulations for the Petroleum Exploration and Production in accordance with section 107 of the Mineral and Petroleum Resources Development Act 28 of 2002 (the "MPRDA").  The new Regulations amend the 2004 Regulations (as amended by the 2006 and 2011 Regulations).  Hydraulic fracturing ("fracking") in South Africa has been met with resistance by environmental rights groups; concerned about possible damage to the environment and contamination of underground water.

The purpose of the new Regulations is stated as ‘to augment the Mineral and Petroleum Resources Development Regulations, so as to prescribe standards and practices that must ensure the safe exploration and production of petroleum’.

The Regulations prescribe numerous requirements that an applicant must meet when applying for permits, rights or authorisations as well as requirements that a holder must meet before exploration and production activities, related to petroleum, may commence. The holder is required to be in possession of an environmental authorisation.  As part of an application for an environmental authorisation, the applicant must assess the geology and geohydrology of the affected area prior to well design and submit a geological overview report.

Fracking involves the use of large volumes of water together with chemical additives; as a result the Regulations provide detailed provisions on the use of water and water resource monitoring.  The Regulations further require an applicant or holder, as the case may be, to among other things, conduct a study which indicates potentially affected water resources on at least a 3 kilometre radius, from the furthest point of the potential horizontal drilling, as well as identify priority water source arears and domestic groundwater supplies indicated on relevant geohydrological maps. Such studies must be conducted by an independent specialist.

A holder must prior to and during all the phases of drilling and fracking operations, among other things, ensure that the operation does not pollute a water resource or reduce such a resource and where such an incident occurs, a holder must implement the necessary remedial measures.

The Regulations also require a holder to undertake a number of risk assessments, which must form part of the environmental authorisation application.

The primary responsibility for identifying, assessing and mitigating well hazards rests with the holder. The Regulations set out the construction standards and a number of requirements in accordance with which, a well must be cased. The Regulations also make provision for the management and transportation of fluids, storage of fluids, waste, pollution incidents, emissions and noise control.

Under the Regulations a holder is required to appoint competent persons to be responsible for the day to day management of the operations in accordance with relevant legislation, policies and relevant operational procedures. This includes ensuring that drilling operations through shallow soils and local aquifers are always undertaken using air, water or water-based mud systems.

It is important to note that the Regulations also provide for instances were fracking operations must be immediately suspended by the holder.  These instances include the following:

  • If an anomalous pressure or flow condition or other anticipated pressure or flow condition is occurring in a way that indicates that the mechanical integrity of the well has been compromised and that continued operations pose a risk to the environment.
  • Hydraulic fracturing fluid must be confined to the target zone and if the monitoring system or water monitoring programme indicates that hydraulic fracturing fluid or hydraulic fracturing flow-back is migrating outside the target zone.  

The Regulations require a holder during fracking to comply with the terms and conditions of the exploration and production right as well as any other authorisations and to conduct operations in a manner that does not pose a risk to public health, life, property and environment.

There have been fears that the environmental damage that may flow from fracking may be far-reaching.   There have been calls from environmental rights groups for fracking regulations in South Africa to comply with best international practices and regulatory requirements and that strict enforcement and penalties are applied in the event of non-compliance.

It remains to be seen whether the new Regulations will enhance South Africa’s existing regulatory framework in ensuring that any resultant negative impacts from fracking would be mitigated.  It may be that a precautionary approach will be followed so as to prevent environmental damage. 

South African law makes provision for mechanisms which are aimed at reducing and managing the impact of mining on the environment.  A contravention or failure to comply with the MPRDA is an offence, punishable by way of a fine and/or conviction.

Moreover, in the event of the holder breaching any material term or condition of a permit or right or failing to comply with any section in the MPRDA, such holder’s permit or right may be suspended, cancelled or terminated by virtue of section 47 and 93 of the MPRDA.

The new Regulations clearly make provision for reducing and managing fracking’s impact on the environment.  However, it is up to the Department of Minerals Resources to ensure full enforcement of the law.

South Africa’s regulatory framework is robust enough to ensure that fracking does not result in environmental damage that will have far reaching consequences for the country.  We wait to see whether the petroleum industry and the environmental rights groups will embrace the new Regulations.