South Africa will accelerate offshore oil and gas exploration to reduce dependence on imports, President Jacob Zuma has said
The government will spend about US$730mn to develop the Saldanha Bay on the southwestern coast as an oil and gas hub, the president announced. Work on some projects has started with the phased gas pipeline routes having been defined, Zuma told reporters while briefing them on progress of ‘Operation Phakisa’ which was launched last year.
Operation Phakisa is inspired by Malaysia’s Big Fast Results Methodology and is a part of South Africa’s Nine Point Plan which is aimed to reignite growth and boost job creation. Once carried out, the project is expected to produce 370,000 barrels of oil and gas per day, and create up to 130,000 jobs, with an annual contribution of US$2.2bn to the GDP, said Zuma.
Various opportunities are being explored under the project, including repairing of rigs and servicing of vessels.
Zuma’s announcement comes at a time when South Africa is facing a power shortage that has led to constant load shedding over the past few months. The successful exploration of oil and gas is expected to ease the worsening energy shortage.
To increase the ease of operation for the oil and gas industry in the country, South Africa is also considering changing relevant laws. There is a plan to split legislation governing the oil and gas sector from the laws governing the mining sector. The country is increasing its exploration of oil, gas and shale and needs a separate law to handle the specific needs of the industry.