South African Business 2016 edition

INTERVIEW Unconventional

INTERVIEW Unconventional Petroleum Resources Sean Johnson (Manager: Unconventional Resource Evaluation, Petroleum Agency SA), is excited about potentially abundant unconventional gas resources that’s waiting to be tapped. Sean Johnson BIOGRAPHY Sean Johnson has 18 years’ experience across a range of geoscience disciplines, including engineering, environmental and marine geoscience, minerals exploration and the upstream petroleum industry. Educated at the University of the Western Cape, Johnson is a registered professional natural scientist with the South African Council for Natural Scientifi c Professions and leads a team of specialist geoscientists responsible for evaluating and promoting South Africa’s unconventional petroleum resources. What areas of exploration is your department involved in? The Unconventional Resource Evaluation department is aptly named as its focus is the evaluation and promotion of South Africa’s unconventional petroleum resources. Through continuous research, our knowledge of the subject has grown substantially over the last decade. On the other hand, these are new and exciting areas of exploration about which, in a commercial sense, relatively little is known for South Africa and can therefore truly be considered ‘frontier’ or greenfi eld exploration. Our evaluation of South Africa’s unconventional petroleum resources is based both on geographic distribution and play-type, with a team of specialist geologists associated with each and naturally, part of the Department’s responsibilities is the assessment of the petroleum potential of the deep and ultra-deep offshore areas. What are the resources you focus on? The resources we focus on includes deep biogenic gas, coal-bed methane, gas hydrates, shale gas and more recently unconventional oil. Our understanding of deep biogenic gas at present is that it is an unconventional natural gas source produced at depth directly by microbes. Coal bed methane (CBM) is a source of natural gas that is generated and stored in coal beds. In South Africa, the presence of methane gas in coal is well known from its occurrence in underground coal mining, where it presents a serious safety risk. Historically, the methane was vented to the atmosphere, but has now become an increasingly important source of natural gas globally. The southern Karoo Basin is considered to be the most prospective area for shale gas, due to the presence of deeply buried, thermally mature black shales. The observation of oil and gas shows across the Karoo indicate an active petroleum system with multi-play potential. Lastly, recent advances in geophysical acquisition and remote sensing techniques have made access to the deep and ultra-deep waters in offshore areas more accessible to exploration. In these regions our focus is gas hydrate. SOUTH AFRICAN BUSINESS 2016 74

How will these resources be developed? With a focus on deep biogenic gas, Molopo SA holds the fi rst and only production right in the unconventional space onshore South Africa at present. There are a number of companies that have expressed strong interest in setting up facilities to capture the gas, but the problem has always been the existence of a gas market, infrastructure and affordable gas pricing. Various partnerships are on the horizon, for example, Sibanye Gold and Molopo South Africa. We understand that Molopo SA will supply Sibanye with compressed gas to power underground locomotives in the mining process. What is the quality of this resource? Deep biogenic gas as we know it, is composed predominantly of methane. As the name suggests, the composition of the gas indicates that it is derived from anaerobic or bacterially generated processes in the subsurface. What is INTERVIEW fascinating is that these organisms are surviving at great depth and subsurface pressure. There are presently many research studies being undertaken in South African universities and new research publications are revealing insightful information about this resource. Our own team in collaboration with South African academics and Australian exploration geologists has made headway with understanding and evaluation of this unique resource type. What are the other valuable by products? As we have observed over the decades, helium is associated with deep biogenic gas and was produced commercially by Anglo American in How extensive is this gas resource? the Welkom area. Substantial quantities of hydrocarbon gases have been observed within the Witwatersrand Basin What is the potential of these resources? during coal and gold exploration activities. Gas shows were discovered in the Free State and Evander goldfi elds several decades ago, and are the most promising target areas for exploring this play type at present. The methane encountered was regarded only as a mine explosion hazard and fl ared in large quantities. Interestingly, gas encountered is not generally contained in traps but rather is being continually generated at depth and migrating to surface along natural fracture systems, faults and dykes. As mentioned earlier, published data indicates that much of the produced gas is of microbial origin, generated by primitive bacteria that inhabit deep water-bearing fi ssures. It is thought that additional gas may be generated within the carbonaceous shale and coal-bearing Karoo strata at shallower depth. However the source and migration pathway of the gas are unusual and present signifi cant challenges to fully defi ne the ultimate potential of the resources as no known analogues exist for this type of gas production worldwide. Exploration companies such as Molopo SA have been investigating whether the methane could be turned to commercial advantage. Most recently, a gas Production Right has been granted in the Free State, with fi rst proven onshore gas reserves (1P) for the region. Given the unusual nature of this unconventional resource, the estimated fl ow rates for the gas-emitting boreholes in the Free State indicate a sustained gas rate of more than 1 million standard cubic feet per day. Without showing any evidence of depletion, this former mining hazard may therefore become a potential renewable future energy source for South Africa. THESE BLOWERS HAVE BEEN EMITTING GAS NON-STOP FOR DECADES AND THERE’S NOW GROWING INTEREST IN TAPPING WHAT IS OBVIOUSLY A POTENTIALLY HUGE NATURAL SOURCE OF ENERGY 75 SOUTH AFRICAN BUSINESS 2016