Clean fuel and security of supply are the issues of the day in the oil and gas industry. The growth in hydrocarbon exploration activities on (or off) SA’s shores speaks to both of these issues.

Since 2005, the number of applications received by Petroleum Agency SA for exploration has been increasing, illustrating “an unprecedented interest in non conventional hydrocarbons”, says the agency’s CEO, Mthozami Xiphu.

The south coast and the offshore areas of the Orange Basin on the west coast are the most prospective areas under licence or application, says Xiphu.

On the west coast, exploration activities for the next two years include big international players. Industry sources say BHP Billiton’s exploration has the potential to yield several hundred billion cubic feet (ft³ ) of gas. (PetroSA is a 30% shareholder.) PetroSA’s prospects may bear gas reserves of more than 1trillion ft³ in block 1 and several hundred barrels of oil in block 2c.

On the south coast, PetroSA plans to extract about 1trillionft³ of gas from the undeveloped F-O field — a project worth US$1bn.

Other upcoming activity includes deepwater exploration for oil by Shell.

SA’s home-grown oil company recognises the benefits of this international presence, says PetroSA. “Risks are shared and expertise and financial capital is pooled,” says PetroSA spokesman Thabo Mabaso.

But the real fruits of indigenous oil and gas are the economic spin-offs.

The gas found in the Ibhubesi gas field off the west coast, for example, will be used as feedstock for a 900MW baseload gas-to-power project. The project aims to supply electricity to SA’s grid (via an independent power producer), and is scheduled to be operating at full capacity from the first quarter of 2015.

The project is operated by Forest Exploration International and 24% owned by PetroSA. “We’re in the market development period,” says Forest commercial director John Langhus.

Gas has been promoted as a cleaner fossil fuel and Langhus says the gas industry views itself as a bridge between conventional oil and renewable energies (gas-based power has 85% less particulates and 60% less carbon than coal- based power).

Onshore, new activities focus on nonconventional hydrocarbons, such as coal- bed methane, and future prospects of shale gas in the Karoo.

A prospective 5-20trillionft³ of gas could be found in the Karoo, say industry players. Shell, global group Falcon Oil and a company called Sungu Sungu have submitted prospecting applications . East of the Karoo, Sasol and international energy company Statoil have technical co-operation permits to study the area. A moratorium on further rights was implemented last month.

Exploration rights, once granted, give the right to drill, but further environmental impact assessments must be met before “fracking”, the controversial technology used to bring the gas to the surface in shale gas projects, can begin.

The bid rounds for exploration rights should be complete by the end of 2012.

Government and oil companies are hoping that any fruits from these exploration projects will be the first step in changing SA’s energy mix.

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