Queue forms for Karoo shale gas

Energy Affairs Editor

AS controversy rages over multinational oil company Royal Dutch Shell's plans to explore for shale gas in the Karoo, more companies are queuing up for their own exploration rights.

The interest of local petrochemicals group Sasol, Norway's Statoil, US group Chesapeake Energy and international company Falcon Oil & Gas in shale gas exploration in the Karoo means that there could be more spats between the companies and communities.

According to thc Petroleum Agency of SA (Pasa), the state body that promotes exploration for onshore and offshore oil and gas resources in SA, the exploration work of these companies could cover almost the entire Karoo area.

Shale gas is natural gas produced from shale, a fine-grained, clastic sedimentary rock composed of mud that is a mix of flakes of clay minerals and tiny fragments.

The exploration for shale gas entails the exploration of wells. Shale gas is extracted from the rock formations through hydraulic fracturing, which increases the rate and ultimate recovery of oil. It creates cracks in the shale which are held open by sand particles and through which the gas can escape into a borehole and up to the surface.

Sasol has said discovery of a large recoverable shale gas reserve in the Karoo basin would be a & game changer& in the broader South African energy market. It would reduce SA's reliance on imported petroleum products.

Shell secured a permit last year to explore for shale gas over 185000km² in the Karoo.

Pasa last year awarded a technical co-operation permit to a joint venture made up of Sasol, Statoil and Chesapeake Energy.

The permit gives them the exclusive right to study whether the natural gas could be explored in the Karoo Basin for a period of up to 12 months, but does not include surface activity or drilling.

In line with legislation, Shell has begun consultations with communities affected by the planned exploration. Shell last month appointed consultants to develop an environmental-management plan, as required by law.

The environmental management plan is a document companies are required to produce detailing how they intend to deal with the environmental risks of their projects.

Tebogo Motloung of Pasa said yesterday that Shell had up to four months to develop the plan, which would require consultation with communities.

Shell Africa communications vice-president Phaldie Kalam said last month that the purpose of the engagements was to provide stakeholders with relevant information about the project, and to identify issues and concerns for consideration in the assessment process.

njobenis@bdfm.co.za

Discovery of a large reserve in the Karoo Basin would be a 'game changer'