Oil and gas Exploration
Oil and gas Exploration is accelerating. Held in Cape Town in September 2023, the third annual Southern African Oil and Gas Conference was the best-attended event since inception. Hosted by SAOGA, the Southern African Oil & Gas Alliance, in partnership with the Department of Mineral Resources and Energy (DMRE) and Petroleum Agency South Africa (PASA), the conference heard presentations from Namibia and Guyana about how those countries are making policy around the development of their oil and gas resources. As Sibablwenathi Magida, PASA Executive Manager Communications & Stakeholder Relations says of Guyana’s chosen growth path, “They are doing it sustainably, growing the oil and gas sector and balancing socio-economic development and transformation imperatives.” The example of Guyana, which has recently discovered vast offshore resources, was both “popular and timeous” for delegates, according to SAOGA CEO Adrian Styrdom. “We were fortunate to have had a look at Guyana as a new oil and gas country and its successful example of combing development, growth and respect for the environment”. Concern about environmental issues has been something that the oil and gas sector has had to deal with, including a number of court cases relating to seismic activity off South Africa’s Wild Coast. A key issue at stake is the extent and quality of the public participation process when it comes to offshore exploration for gas and oil. WSP Group Africa has been appointed by the consortium which has discovered gas reserves off the coast of Mossel Bay to run the environmental and social impact assessment (ESIA) for their proposed offshore production. Having notified PASA of their intention to produce, TotalEnergies EP South Africa (TEEPSA), together with its joint venture partners, QatarEnergy, CNR International (South Africa) Limited and a South African consortium, SECTOR INSIGHT The Southern African Oil and Gas Conference was the biggest yet. MainStreet 1549, are obliged to run a public process, having successfully explored the area allocated to them off the southeast coast of South Africa. The same companies and others are also applying for environmental authorisation to undertake exploration activities in Block 5/6/7 between Cape Town and Cape Agulhas, approximately 60km from the coast at its closest point and 170km at its furthest, in water depths between 700m and 3 200m. This area holds even greater potential than the southern Cape coast. Shell’s announcement that it had made significant oil and gas discoveries in the southernmost sector of its Orange Basin offshore Namibia is significant because the area is in the same sedimentary basin as South African offshore territory. WESTERN CAPE BUSINESS 2024 24 PHOTO: PASA
OVERVIEW The geological sedimentary basin extends to offshore Cape Town and out to sea, stretching over 160 000km². Analysis of data shows similar prospectivity in the South African section. The rights to the South African southern section of the basin are held by Shell and its partners TotalEnergies and PetroSA. Onshore exploration rights are also being granted. The one attracting the most attention is the Virginia Project in the Free State, but PASA’s Manager: Resource Evaluation, David van der Spuy, notes that, “There are other types of unconventional gas onshore, such as coal-bed methane and gas.” He rates the country’s potential for onshore gas as “very good”, including the shale gas deposits of the south-central Karoo where studies show a potential of 209TCF recoverable gas. Basin-analysis studies also show potential for conventional deposits of dry gas and wet gas. Oil and gas infrastructure The Saldanha Bay Industrial Development Zone Licensing Company (SBIDZ-LC) has announced the start of phase one of the development of the main infrastructure of the IDZ. Located within the southern hemisphere’s deepest and biggest natural port, the company will spend R3.5-billion on developing 356ha of space to enable the port to offer a wider variety of services. A floating dock, ship-lift facilities and marine service jetties will be among the new services created. Ultimately, the seven-part development plan will see the SBIDZ become a South African Freeport, a Special Economic Zone and customs-controlled area within a port, dedicated to the oil, gas and marine sector. Astron Energy reopened its Cape Town refinery in stages in the course of 2023, having closed the facility for repairs in 2020 after a fire. The Astron refinery had been producing about 100 000 ONLINE RESOURCES Petroleum Agency South Africa: www.petroleumagencysa.com Saldanha Bay Industrial Development Zone: www.sbidz.co.za South African Oil and Gas Alliance: www.saoga.org.za Western Cape Maritime Cluster: wcmc.org.za barrels per day using feedstock from West Africa, a source which will be reinstated. Cape Town’s oil refinery was previously named Chevron, but with the 3-million purchase of Chevron’s downstream assets in South Africa by Off The Shelf Investments (OTS), it was rebranded as Astron. The Caltex service-station brand was retained. OTS is the Black Economic Empowerment (BEE) partner of mining giant Glencore, who financed the deal. The refinery in Milnerton produces petrol, diesel, jet fuel and liquefied gas for the Western Cape and for export to other African countries. The Bergun terminal, comprising 12 tanks located on the Eastern Mole of the Port of Cape Town, is connected by pipeline to the Astron refinery. The Western Cape spends R76-billion annually on crude oil imports and exports refined petroleum to the value of R13.2-billion. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. Problems in the container ship market have caused some stress in the local sector but the long-term prospects for shipping and oil and gas are still strong enough for national government to pursue Operation Phakisa (which includes a strong maritime economy push) and for Transnet National Ports Authority to spend heavily on upgrading the nation’s ports. ■ PHOTO: SAOGA 25 WESTERN CAPE BUSINESS 2024
