Pestle Analysis of Petrosa

Pestle Analysis of petroSa

Political

• The oil and gas industry is facing some severe pressures of a challenging economic and political environment on the South Africa

• It is driven by weak infrastructure, corruption, an unclear regulatory framework, and a lack of skills, according to a review issued by PwC

• Oil and gas companies have recognized ambiguity as a key constraint to sustaining growth.

• Political intervention, uncertainty and suspensions in passing laws, energy policies and regulations are boiling growth, development and investment in South Africa

• South Africa has just been regarded as having a clear and autonomous process with the Petroleum Agency of South Africa (PASA)

• However, proposed amendments to the Mineral and Petroleum Resources Development Act will see its utilities transferred to the Department of Energy. This could produce an uneven playing field for rivals and allow for state intervention

• Proposed changes to the Mineral and Petroleum Resource Development Act in South Africa will be of concern to E&P companies in the country as it could allow the Government to partly nationalize license blocks

• Tax disputes still remain a worry for the business in the industry, as well as the training or recruitment of local talent at the levels required by legislation and government quotas.

Environment

• The environmental spending has deteriorated since 2010 in South Africa

• No company is aside setting more than 20% of their forecasted capital expenditure (capex) to environmental concerns.

• Over 80% of organizations expected their safety, health, environment and quality (SHEQ) costs to increase in 2015 and 2016.

• 1 out of 6 believe that costs will increase significantly in 2016, mainly due to expected introduction of new regulations such as the stricter implementation of gas flaring regulations, new legislation and cleaner fuel requirements in South Africa in 2014.

Social

• The mandate for local skills development has become a distress for businesses operating in the oil & gas sector throughout South Africa.

• In 2012, the survey showed that one-fourth of the total workforce at respondents’ companies comprised emigrants. This year, the proportion of emigrants has dropped considerably – down to a mere 10.6% of the workforce surveyed.

• Most companies are filling middle to senior management as well as specialist technical roles with locals from their