Mozambique, Tanzania lead African charge

South African prospects

Further south, South Africa appears to be attracting greater oil and gas exploration than ever before, partly as a result of technological advances but also because of gas discoveries offshore neighbouring states. Shell has begun exploration work in the Orange Basin off the west coast, close to the border with Namibia, possibly attracted by the discovery of the Kudu gas field further north. Elsewhere, Exxon Mobil has secured acreage off the coast of KwaZulu-Natal, while other investors include Anadarko Petroleum and BHP Billiton. The resource evaluation manager at the state regulator, Petroleum Agency SA, Dave van der Spuy, commented:

“The presence of one super major makes others take an interest. The level of activity and interest in South Africa is at its highest ever.” According to the agency, all South African exploration acreage is either already licensed or about to be so. Ten licences were granted in 2011 and eight in 2012. Any gas discoveries would find a convenient local market in the form of South Africa’s gas-to-liquids (GTL) industry and also the power sector. The government is committed to reducing the country’s reliance on coal-fired capacity and it is hoped that new gas-fired plants can be developed in the coastal provinces that have long depended upon power imports from the Mpumalanga coal fields.

Simon Ashby-Rudd, the head of oil and gas at Standard Bank, said: “If they find significant volumes, it will fundamentally change the energy infrastructure of South Africa and cheap domestic energy, as you’re finding in the US, will revolutionise the economy. Demand is clear and in certain basins around the coast of South Africa the source has been established. Now the hunt is on to find the appropriate geological structures.” The government has proposed changing the current investment environment in order benefit directly from any new discoveries. Planned changes to the Mineral and Petroleum Resources Development Act would give the state or state owned companies automatic stakes in any commercial projects.