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Vast majority of SA’s offshore oil and gas blocks already under licence, application

Interest in oil and gas exploration off South Africa’s coast has, in the past four years, accelerated to such an extent that nearly all the country’s offshore exploration blocks are under licence or under application for exploration by independent companies, Petroleum Agency SA geologist Jonathan Salomo told delegates at the Gas Africa conference.

“There has been a dramatic change in the last few years, which has been driven by new legislation, neighbouring offshore finds and a sustained high oil price. This has been further bolstered by Petroleum Agency SA’s own efforts to attract explorers,” he said.

Producers were also looking for supply alternatives to the oil-rich, but politically unstable, Middle East oilfields and have been further attracted by recent legislation in terms of the Mineral and Petroleum Resources Development Act, which Salomo argued had provided a degree of risk-share with the South African government.

Offshore exploration activity over the past two years had produced some 21 000 km2 of three-dimensional survey data and over 36 200 km2 of two-dimensional data.

While emphasising that an accurate quantification of South Africa’s offshore oil and gas potential remained elusive, at present, Salomo maintained that, based on geological modelling and long-term predictions, Petroleum Agency SA, which promotes exploration for onshore and offshore oil and gas resources, had estimated prospective offshore oil and gas resources at 21.75-billion barrels and 62.4-trillion cubic feet respectively.

Of this, 10.2-billion barrels of oil and 27.7-trillion cubic feet of gas was attributed to prospective resources along the West Coast of South Africa, while 9.55-billion barrels of oil and 25.5-trillion cubic feet of gas was estimated for blocks off the country’s South Coast.

“Prospective resources along the East Coast of the country are estimated at two-billion barrels of oil and nine-trillion cubic feet of gas. I must, however, emphasise that these figures are not yet proven,” he outlined.

Among the largest offshore oil and gas projects currently under way was the Ibhubesi gas project off the West Coast – a joint venture between South African national oil company PetroSA and Australian independent energy group Sunbird Energy.

This project would see the development of a 400-km-long gas pipeline, two shorecrossing sites – one between Grotto Bay and Duynefontein and the other on the Saldanha Peninsula – and the construction of an onshore gas-receiving facility near Ankerlig, in the Western Cape.

“The offshore field is expected to begin production in late-2017, early 2018, with an initial flow rate of 100-million standard cubic feet of gas a day,” Salomo said.

Along the South Coast, several global energy groups were embarking on shallow and deep-water exploration, while interest in the blocks along South Africa’s East Coast had largely been driven by recent discoveries in nearby Mozambique and elsewhere in East Africa.

Energy giants ExxonMobil and Total, besides others, had secured exploration licences along this coastline.

ONSHORE INTEREST

Salomo added that interest in onshore oil and gas exploration drilling had also increased in recent years, driven by reports of a massive shale gas deposit in the Karoo basin.

“There is a high level of interest in onshore activity, despite carbon exploration still being in its infancy. While the Karoo basin was explored for oil in the 1960s and 1970s, new interest in the region has been driven by interest in coalbed methane, shale gas and biogenic gas,” he commented.

Noting that Petroleum Agency SA believed the shale gas deposit to be “significant”, Salomo said the group estimated the recoverable resource of this deposit at 40-trillion cubic feet.

Coalbed methane exploration, meanwhile, was largely focused in the Lephalale and Mopane sub-basins, in the north of the country, and was estimated by the agency to offer prospective resources of 17.9-trillion cubic feet.

NATALIE GREVE

ENGINEERING NEWS

27 AUGUST 2014