Free State Business 2022

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Mafikeng
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Molteno
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Klerksdorp
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Welkom
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Virginia
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Aliwal North
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Queenstown
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Kroonstad
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Indwe
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" Maseru
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" Lephalale
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Elliot
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Maclear "
Modimolle
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Bela-Bela
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Bethlehem
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Frankfort
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Evander
Umtata
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Mokopane
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Witbank
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Secunda
Standerton
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Harrismith
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Polokwane
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Tshipise
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Makhado
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Ermelo
Volksrust "
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" Newcastle
Estcourt
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Musina
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Dannhauser
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Utrecht
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Pietermaritzburg
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Vryheid
Port Shepstone
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Phalaborwa
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Mbabane
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Pafuri
Nongoma
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Richards Bay
St. Lucia
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Locality
most carbon-intensive and fine particulate matter
affects people’s respiratory systems.
In addition to coal, South Africa imports
oil, gas and petroleum products for its energy
needs as the upstream petroleum industry is still
at a nascent stage. The two recent world-class
offshore gas discoveries in the Outeniqua basin
are the biggest petroleum discoveries made in
South Africa.
The development of these discoveries has the
potential to replace more than 2 300MW of dieselfired
electricity generation, thereby reducing
the carbon emissions by more than 50% while
eliminating sulphur oxide and nitrogen oxide
emissions. Gas is therefore an obvious bridge to a
lower carbon future.
The Petroleum Agency SA awaits the licensee
of these gas discoveries submitting its production
right and environmental authorisation applications
when the exploration right expires, or earlier. The
agency expects the licensee to use world-class
technologies and standards to minimise the effects
of the gas and gas condensate production on the
environment, while maximising the in-country
benefit or local content from this development to
support SA’s economic recovery.
These discoveries could indeed support both
the country’s economic recovery and its transition
to a clean energy future.
Onshore exploration opportunities are
represented by unconventional resources such
as shale gas in the south-central Karoo, coalbed
methane in the coalfields of the east and northern
sectors of the country and biogenic gas in the
Virginia and Evander regions. However, geological
analysis is showing that there may well be
significant potential for conventional oil and gas
resources onshore.
Conducive investment environment
South Africa has a history of political stability and
the new UPRD bill (Upstream Petroleum Resources
Development Bill) will assist the Agency in expediting
exploration through close management of acreage
allocation and work programmes. These positive factors
create a conducive environment for PASA to pursue its
mandate of attracting investment into the upstream
petroleum industry.
Coal Field
SOUTH
Gas discovery
Provincial boundary
Karoo Basins
Northern Cape
AFRICA
North West
Free State
Eastern Cape
Bloemfontein
LEPHALALE
BASIN
Waterberg
Free State
MAIN KAROO BASIN
Molteno
Figure 32. Distribution of coal fields in the Karoo-aged basins in South Africa (digital geological data sourced from Council for Geoscience)
Gas and coal-based methane are found in many parts of
South Africa’s interior. Credit: PASA, with digital geological
data sourced from Council for Geoscience.
The draft bill provides greater policy certainty and a
stable environment for investment in the South African
oil and gas sector. It provides security of tenure by
combining the rights for the exploration, development
and production phase under one permit.
As far as the issuing of exploration rights over
the last 18 months is concerned, a total of 21
exploration rights for both onshore and offshore
were issued during this period, including renewals
and new exploration rights.
As of December 2020, there is no longer a
moratorium on applications for rights onshore,
other than those for shale gas in a specified
area covering the central Karoo. Other onshore
applications continue to be received and processed
in terms of the MPRDA. The moratorium for shale
gas rights and new offshore applications remains
in place and is expected to be lifted with the
enactment of the hydraulic fracturing regulations
(for environmental management and water use) for
the shale gas extraction technologies. ■
Pretoria
Johannesburg
Gauteng
Lesotho
TULI BASIN
Tuli
Mopane
Limpopo
SPRINGBOK FLATS BASIN
Springbok Flats
Witbank
Highveld
Tshipise
TSHIPISE BASIN
Ermelo
Utrecht
Klip Rivier
Pafuri
KwaZulu-Natal
Mpumalanga
Kangwane
Swaziland
Vryheid
Nongoma
Somkele
Durban
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FREE STATE BUSINESS 2022