Opportunity Issue 108

South Africa’s oil and gas
sector is welcoming investors
Productive onshore gas discoveries and investment in production studies show that Petroleum Agency
South Africa is hard at work promoting the case for investment into the country’s abundant resources.
These are exciting times for
the oil and gas sector in
South Africa. The application
by TotalEnergies for the
right to produce off the south coast
of South Africa signals an important
new phase in the development and
growth of the national oil and gas
sector. Extensive exploration has
confirmed that a significant resource
lies off the coast of Mossel Bay. In 2022,
Tetra4, a wholly-owned subsidiary
of Renergen, started commercial
production of liquid natural gas (LNG)
from their plant in the northern Free
State. In January 2023, the company’s
helium plant became the eighth place
in the world to produce that gas.
These are initiatives and investments
in which PASA has played a vital role,
in assessing the exploration bids,
in granting bids, in checking the
environmental impact assessments
to ensure that they comply with
standards and liaising with developers
in many other ways.
The Virginia Gas Project, a project licensed and approved by PASA, has the potential to create
an entirely new subsector within the South African oil and gas sector. Tetra4, a subsidiary of
Renergen, has started delivering liquified natural gas (LNG) to customers. Credit: Renergen
Facilitating investment
Petroleum Agency South Africa (PASA), the custodian of the
country’s oil and gas resources, and which facilitates and promotes
responsible investment into the sector, sees a major role for gas in
helping the country transition to cleaner energy sources. As joint
host of the third annual Southern African Oil and Gas Conference
held in Cape Town in September 2023, PASA unveiled the positive
aspects for investors of the South African oil and gas sector, the
regulatory environment and the considerable size of the resources,
both onshore and offshore.
Further participation at events such as the African Mining
Indaba and the Africa Energy Indaba underscore the vital role
that PASA plays in promoting the country as an investment
destination and interacting with companies from around the
world. As things stand, natural gas supplies just 3% of South
Africa’s primary energy. A significant challenge facing the
development of a major gas market is the dominance of coal.
Opportunities for gas lie in the realisation of South Africa’s National
Development Plan (NDP) and the Integrated Resource Plan (IRP).
Helium onshore
When the SpaceX rocket launched in 2021, 11 tons of helium was
used to propel it off the ground. Every computer microchip in the
world is produced in the presence of helium and the world uses 85
tons of it every day. Although it’s a very useful element, it’s also a
very difficult element. The result of that is that Renergen, the owner
of the Tetra4 company that holds the first onshore petroleum
production right issued by the Department of Mineral Resources
and Energy (DMRE), has had to import much of its equipment and
many of the skilled personnel it needs to commercialise the gas
field. However, as the project ramps up production, employment
numbers will increase over time. The field covers 187 000ha in the
region of Virginia, Theunissen and Welkom. Hiring has increased
rapidly since 2019 as the project ramps up from the first phase in