South African petrochemical giant Sasol is shelving exploration plans for shale gas in the Karoo, at least for now, the company said on Thursday.
The government had already imposed a moratorium on exploration in the semi-desert Karoo until February 2012 amid fierce opposition from environmental groups over the use of hydraulic fracturing drilling to release underground resources.
“We recently concluded an extensive technical study for shale gas in the Karoo Basin in South Africa,” Sasol’s chief financial officer Christine Ramon said in a statement.
“The technical cooperation permit which allowed us to do this expired on November 17 2011 and we have decided not to pursue further exploration activities in the area at this stage,” she said.
“Sasol will, however, continue to monitor the South African shale gas landscape for new developments.”
The Treasure Karoo Action Group (TKAG) welcomed this decision.
“We welcome Sasol’s decision, particularly as the company appears to have taken time to actually listen to the people of the Karoo and acknowledge their concerns,” the group said on Thursday.
The TKAG is resisting what it has labelled the exploitation of the Karoo by mining companies before independent scientific research has been conducted.
TKAG chairperson Jonathan Deal said the group hoped to persuade Shell and other companies who had also applied for exploration rights to show the same concern for the people living in the area, whose livelihoods and health could be placed in jeopardy as a result of fracking.
“We call on all residents of the Karoo and our supporters and members to join TKAG in congratulating Sasol on a responsible and sensitive decision,” he said.
“We hope that this action by a global player in the energy field will act as a wake-up call to Royal Dutch Shell and other companies who still pursue their applications to frack in South Africa.”
Shale gas extraction — developed in the United States and Canada — uses a combination of water, sand and chemicals to blast into hard rock to release gas locked inside.
South Africa is also interested in the technology, known as fracking, which could help the coal-dependent nation reduce its carbon emissions while developing new domestic energy sources.
But environmental groups and residents in the Karoo fear the process could pollute scarce water supplies and upset the region’s delicate ecological balance.
Anglo Dutch energy giant Shell has expressed interest in a $200-million exploration programme, and indicated that developing the reserves could generate billions of dollars of investment in a country desperate for jobs. — Sapa