Gas discovery could rescue South African economy - experts

  • Written by  Mervyn Naidoo

A TRILLION rand over 20 years could pour into the country if a gas discovery in the Outeniqua Basin, off the southern Cape coast, is tapped.

French oil and gas company Total announced on Thursday that it had found gas condensate on the Brulpadda Prospects, which is located on Block 11B/12B in the Outeniqua basin.

It represents about a billion barrels of oil equivalent and is found about 175km off the southern Cape coast.

President Cyril Ramaphosa shared news of the find during his State of the Nation Address on Thursday night.

He said: “This could well be a game-changer for our country and will have significant consequences for our country’s energy security and the development of this industry. We congratulate Total and its various partners and wish them well in their endeavours.”

Ramaphosa said some had described it as a “catalytic find”. Several economists and experts in the field of oil and gas explorations shared his enthusiasm.

They believed there could be other significant finds which would have a positive impact on the country’s fuel costs. South Africa imports crude oil and pays in American dollars.

Total’s senior vice-president, Kevin Mclachlan, said: “We are very pleased to announce the Brulpadda discovery, which was drilled in a challenging deep-water environment. With this discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” said Mclachlan.

Mineral Resources Minister Gwede Mantashe visited the rig last weekend and said Total would follow up with three-dimensional seismic tests on four exploration wells.

Aldworth Mbalati, chief executive of South African oil and gas exploration company DNG Energy, said any natural resource found was good for the country.

“It means we have a resource that enables energy security and will benefit the people of our country. Gas plays a critical role as a transition fuel which is cleaner and its CO2 emissions are 60% less than fossil fuels.

“So, with gas, we are achieving our objective of keeping the country’s economy running and preserving the environment,” said Mbalati.

However, he advised a quiet celebration right now.

“It is not the world’s greatest find. There is still a long way to go to realise the value out of the asset, but it has put the country on the map as a gas province. It also means we potentially have bigger reserves and resources.”

Luvuyo Mokasi, chairperson of the Central Energy Fund, said gas or oil on our shores spoke to the broader concept of the ocean’s economy, which the president spoke about during his address.

“It will be helping the fuel and the energy security of the country and it will be a mechanism to help counter the country’s ever-rising fuel price.”

Mokasi said it was exciting because blocks that were near Total’s site were owned by PetroSA.

“This gives us a sense of what’s in our seas; there is more to come,” Mokasi predicted.

Dr Azzar Jammine, director and chief economist at Econometrix, said he was aware that Total’s find was about R1trillion over 20 years.

“So that’s about R50billion, which equates to about 1% of the gross domestic product. If it works, that’s great. But, it has to be managed well. If not, we won’t get the full benefit.”

Economist David Shapiro agreed the news was positive. “We import most of our oil and gas needs. If we prevent that, it will save us enormous amounts in foreign exchange.

“But before we get excited, let’s get more details about the quality and success,” he said.

Professor Bonke Dumisa of the University of KwaZulu-Natal said while the find had the potential to alleviate some of South Africa’s economic problems, we should share some of the benefits with our neighbours.

Dumisa said he was also disappointed that media had not made a bigger splash of the news since the president’s address.

“This could spell a better life for all, provided we don’t allow corruption to creep in. Look at what happened in Nigeria, the people haven’t benefited from their oil reserves,” Dumisa said.

Melita Steele, Greenpeace’s senior climate and energy campaign manager, said there was always the risk that deep sea oil exploration would impact on marine life.

“We believe drilling off-shore is too risky,” she said.

Login to post comments
back to top

BEAMED BC-TV

Latest on Economy

Economy

Libya government partners with World Ban…

21 février, 2019 | Hits:15

The World Bank Group has announced a new strategy ...

Economy

IFAD, Egypt sign $81 million deal to pro…

21 février, 2019 | Hits:11

The International Fund for Agricultural Developmen...

Economy

Jack Ma’s US$10 Million Africa Netpreneu…

21 février, 2019 | Hits:9

The Africa Netpreneur Prize Initiative (ANPI) will...

Economy

Lean Africa Consultants arranges infrast…

21 février, 2019 | Hits:15

Nairobi-based consulting firm Lean Africa Consulta...

Economy

South African Airways to separate into t…

21 février, 2019 | Hits:15

South Africa’s national carrier, South African Air...

Economy

Innova to open $40 million plant in Keny…

20 février, 2019 | Hits:16

Innova Eco Building System has entered into a join...

Economy

170 000 register to grow tobacco

20 février, 2019 | Hits:22

Tobacco grower registrations for the 2019 marketin...

Economy

FAO alerts on Desert Locust outbreak in …

20 février, 2019 | Hits:25

Heavy rains and cyclones have triggered a recent s...

Economy

UN raises alarm on drought crisis in SAD…

20 février, 2019 | Hits:26

Gaborone- The United Nations has warned of a loomi...

Economy

Angola has significant production of man…

20 février, 2019 | Hits:27

According to the official who was speaking at the ...

Economy

Wheat consumption rising in Africa

20 février, 2019 | Hits:21

Africa has been a fast-growing grain import market...

Economy

Azuri and FirstBank partner to bring sol…

19 février, 2019 | Hits:25

Azuri and First Bank of Nigeria Limited have annou...

Economy

Nigeria, India pledge deeper collaborati…

19 février, 2019 | Hits:26

Nigeria and the Republic of India have pledged to ...

Economy

South Africa: Africa Energy Indaba 2019 …

19 février, 2019 | Hits:21

The much-anticipated Africa Energy Indaba, held in...

Economy

African Leaders Support Dangote, Imoukhu…

19 février, 2019 | Hits:33

Jonathan Eze and Chris Uba Heads of Government acr...

Economy

Are East Africa's business laws scaring …

19 février, 2019 | Hits:19

East Africa’s regulatory environment and its inves...

Economy

Ethiopia and Djibouti to build gas pipel…

19 février, 2019 | Hits:104

Ethiopia has signed a deal to develop a gas pipeli...

Economy

Western Union introduces new payment opt…

18 février, 2019 | Hits:33

The Western Union Company, a player in cross-borde...

Economy

Mauritius most connected country in Sub …

18 février, 2019 | Hits:26

Global logistics company DHL has released the fift...

Economy

Agriculture task force takes aim at EU i…

18 février, 2019 | Hits:31

An expert group convened by the European Union to ...

By Category

Local News

User Menu

About Us

Follow Us