Litigation Stalls Local Gas Sector As Sa Eyes Major Discoveries, Says Mantashe

South Africas oil and gas sector has played second fiddle to other energy sources, particularly renewables, over the past five years but with the recent restructuring of the Department of Mineral Resources and Energy into two separate entities, the government is now able to focus on advancing the industry.

This was the message from Minister of Mineral and Petroleum Resources, Gwede Mantashe , speaking at Africa Oil Week AOW in Cape Town this week October 8-10.

The importance of new regulatory measures, including the establishment of the South African National Petroleum Company SANPC and the Petroleum Products Amendment Bill PPAB were essential to unlock the potential of the countrys oil and gas discoveries, he said.

This includes discoveries of gas and condensate in blocks 11B and 12B in the South Outeniqua Basin and finds in the South African Orange Basin. This under-explored deep-water area is seen as a promising frontier for future oil and gas production, Mantashe said. There is also growing interest in the South African Orange Basin, where TotalEnergies is preparing for drilling in the Deep-Water Orange Basin DWOB block, and exploration work is advancing in Block 3B/4B and the Northern Cape Ultra-Deep-Water Block.

South Africa has exciting opportunity with shale gas plays in the Karoo Basin where up to 5,9 trillion cubic meters of gas is estimated for development. There are potential opportunities for long-term, cheaper indigenous gas supply from the Karoo Basin that could contribute to South Africas growing energy needs, he said.

The Ministry has already gazetted its intention to conduct a geophysical investigation across the region.

In terms of regulatory support, the Upstream Petroleum Resources Development Bill, recently passed by Parliament, is set to regulate the upstream petroleum industry separately for the first time in South Africas history, Mantashe said. The bill, once enacted, is expected to stimulate growth in the sector, following the success of countries like Namibia, whose recent oil discoveries have the potential to double its economy by 2040. The establishment of the South African National Petroleum Company SANPC will further enhance the countrys capacity to manage its petroleum resources and develop partnerships in the sector.

South Africa stands to gain financially from these discoveries. The main hindrance to gas and oil industries in South Africa is the unabated and frivolous litigation against the exploration and production of oil and gas by Non-Governmental Organisations and foreign-funded groups, Mantashe said.

Despite these challenges, successful seismic data acquisition by Searcher in April 2024 on South Africas west coast demonstrated that exploration can proceed without environmental harm, he said. Government has also made progress in securing local liquid fuel supplies, with the Central Energy Fund CEF acquiring assets at the SAPREF Precinct to reinforce supply in the wake of several refinery shutdowns.