BHP set to join new oil-gas explorers in SA

BHP Billiton, the world’s biggest diversified miner, plans to drill for gas off South Africa’s west coast and will get exploration permits by August, an official said.

BHP should receive off-shore oil and gas exploration permits from South Africa by then, but it was unsure when activities would start due to a scarcity of drilling rigs, David van der Spuy, a resource evaluation manager at Petroleum Agency SA, which promotes and regulates oil and gas exploration and production in South Africa.

Africa’s largest economy is a net importer of crude and refined oil products and unlike the continent’s top oil producers Nigeria and Angola, South Africa has limited proven hydrocarbon reserves.

The permits would allow BHP to take part in exploration, currently being pursued by companies such Anglo Operations, a unit of Anglo American, and oil major Royal Dutch Shell.

Billiton owns 90% of Block 3B/4B, which Van der Spuy said had the potential for “large amounts of oil” although this remained unproven until drilled.

Under South Africa’s mining laws, the government has taken over as custodian of mineral rights, and all companies must reapply for mining and prospecting licenses. Van der Spuy said BHP was likely to be awarded the new permits soon.

“BHP Billiton holds the area on sub-lease under the previous legislation and have had to convert as have other explorers … The conversion is imminent,” Van der Spuy told Reuters.

Billiton, in partnership with South Africa’s national oil company PetroSA and Sasol, the world’s top coal-to-fuel maker, would also explore for shallow water gas in block 3A/4A.

This area is immediately south of the Ibhubesi gas field being developed by US company Forest Exploration International with production forecast by 2013.

Potential for unconventional resources
However, it was developments on land that Van der Spuy felt could hold the best chance for South Africa to significantly reduce its dependence on imported crude oil and gas.

About 40 licenses have been approved to explore for coal bed methane (CBM) — gas associated with large coal deposits and concentrated in the Mpumalanga and Gauteng areas.

“Coal bed methane is a major industry in Australia, in the US, but is unproven here. Its size in terms of gas resource is entirely unknown [in South Africa],” he said.

However, Anglo’s operations in the coal-rich Waterberg region provided positive clues, showing extractable CBM potential resources of more than one trillion cubic feet of gas.

Another alluring area of unconventional gas reserves, found mainly in the Karoo Basin, was shale gas which had helped decouple the gas price from the oil price in the United States, said Van der Spuy.

He said Shell, as well as US-based Falcon Oil and Gas, have started with a technical cooperation permit agreement which gave them a year to examine data without the need for drilling.

The two companies will submit a report early in 2011 on the area’s prospectivity, and will have first option to explore. – Reuters

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Wendell Roelf
Wendell Roelf has over 48 followers on Twitter.
Advertisting

The rule of law in times of crisis: Covid-19 and...

Under a state of national disaster, some rights may be suspended. But it is critical to remember that the Constitution itself is not suspended

Test backlog skews SA’s corona stats

With thousands of samples still waiting to be processed, labs are racing to ramp up testing to help the government gain a better idea of how prevalent Covid-19 really is

New power providers to be authorised

The energy department last week took out a draft of determinations proposing more than 13000MW of power to be supplied

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories