South Africa’s petroleum regulator said Falcon Oil & Gas and Bundu Gas and Oil Exploration have applied for shale gas exploration permits as the nation looks to reduce its dependence on petroleum imports.
“We’re certainly going to have significant exploration in the next three years or so,” said Mthozami Xiphu, chief executive officer of Petroleum Agency, by phone from Cape Town.
“In the next five, six years, we do expect the beginnings of significant production,” he said.
Shellis studying data from an area of almost 200,000 sq km (78,000 sq m), while a group including Chesapeake Energy, Statoil and Sasol has been granted a technical cooperation permit over about 88,000 sq km in the scarcely populated, arid Karoo region in the centre of South Africa.
Falcon, based in Denver, applied for exploration rights there after undertaking initial studies, Xiphu said.
Anglo American, which owns stakes in the world’s largest diamond and platinum producers, has applied for a technical cooperation permit over an area thought to contain shale gas, the company said in an e-mailed response to questions today.
While drilling by former state-owned oil and gas company Soekor proved the presence of shale gas in the Karoo, the Petroleum Agency does not know how much South Africa has, Xiphu said.
Finding significant reserves would change South Africa’s energy profile, he said.
“We are by far a net importer of energy resources in South Africa. We produce hardly 40 per cent of the hydrocarbons we need.”
Shale gas could also be a solution for PetroSA, South Africa’s oil and gas company, which is looking for an energy source to replace the dwindling natural-gas reserves it taps from below the ocean floor on the west coast, Xiphu said.
While PetroSA hasn’t applied for rights to explore for shale gas, companies that obtain production permits have to give PetroSA a 10 per cent interest in their projects, Xiphu said.
Water access will be a challenge in the Karoo as the area has limited resources, while producers may also encounter opposition from the many farmers in the area, Xiphu said.
While the Chesapeake-Statoil-Sasol group has been granted a technical cooperation permit, it has yet to be issued, Xiphu said.