South Africa Wants E&P Free Carry

Friday, November 1, 2013

The government of South Africa is looking to take a 20% free carry in new oil and gas exploration and production projects under new proposed legislation, according to the Department of Mineral Resources.

While the government hopes that this new legislation will translate into an injection of revenue into its coffers, it could in fact have the opposite affect and deter new investment in the industry.

According to a Reuters report the proposed legislation says the government should get a minimum 20% “free carried interest,” giving it all the benefits of a shareholder but none of the obligation to contribute funds to the project.

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