South Africa’s shale gas potential could have a major impact on the country’s economy as it struggles with power shortages and outages.
Mthomazi Xiphu, chief executive of Petroleum Agency of South Africa (Pasa), the nation’s regulatory body, said this unconventional resource “may have the potential to change the energy profile of the country”.
Studies are being carried out in the Great Karoo basin in central South Africa by a number of companies, big and small, under technical co-operation permits.
Anglo-Dutch supermajor Shell is close to completing work under its TCP, said Xiphu, while Denver-based Falcon Oil & Gas has seen enough in its initial desktop studies to apply for exploration rights over 30,350 square kilometres.
If granted, Falcon will have to drill one or two wells next year and these operations will attract much interest.
The US company’s focus is gas thought to lie in fractured shale and in sandstone in Permian rocks.
Toronto-listed Falcon plans to begin talks with potential farm-in companies if it secures an exploration right. Another group mid-way through its TCP evaluation work is a joint venture of Chesapeake, Statoil and Sasol Petroleum while Bundu Gas, a subsidiary of Australia’s Sunset Energy, has re-submitted an application for exploration rights.
Bundu is furthest along the exploration path having already applied for an exploration right though this was refused by Pasa.
It has now re-submitted its application to address issues raised by the agency.
The company believes its Cranmere acreage could hold multi-trillion cubic feet of resource and would aim to pipe it to Petrosa’s Mossel Bay synfuels plant or maybe to the Coega industrial zone in Port Elizabeth.
Despite no on-the-ground shale gas exploration efforts having taken place in the Karoo basin, the public and local media are already worried about environmental effects.
Xiphu, speaking at Africa Upstream, acknowledged the public’s concern in the aftermath of events in the US and said the Petroleum Agency aims to learn from overseas experience.
“Exploitation of shale gas has not been applied in South Africa and these applications have attracted a great deal of attention in the area,” he said.
“The agency is fully aware of shale gas and the... misconceptions and truths concerning possible environmental damage and threats to groundwater quality from hydraulic fracturing of the host rock.”
Xiphu said as with any other applications to carry out exploration activity, “we will apply the pertinent technical expertise to make sound decisions and to make sure all potential environmental issues are responsibly addressed through the environmental management programmes and actions of the relevant exploration companies”.