ASX-listed Challenger Energy, whose subsidiary Bundu Gas and Oil Exploration is aiming to explore for shale gas in South Africa’s Karoo, says it expects to be in a position to pursue its exploration programme in parallel with government's two-year strategic environmental assessment (SEA) of shale gas development in the country.
Government formally launched the R12.5-million SEA earlier this week in an effort to develop the “evidence base it needs to make informed decisions regarding the exploitation of shale gas”.
Challenger Energy tells Engineering News Online that it is supportive of South Africa’s efforts to ensure safe and sustainable exploration and development and that it does not view the SEA as a major risk to its exploration plans. Government has also indicated that the study is not intended to delay the start of exploration activities.
In February, Bundu submitted an updated Environmental Management Programme to the Petroleum Agency South Africa and Challenger says it expects the Department of Mineral Resources to publish a Gazette notice in the coming weeks outlining the regulations governing the exploration phase.
Bundu's exploration right application is based on an initial work programme that does not include hydraulic fracturing, or fracking, so “we expect to be able to proceed in parallel” with the SEA.
The work programme, which will start once an exploration right is granted, covers studies such as water sampling, the reprocessing of the original seismic tests and up to three boreholes to collect core samples. Bundu expects to begin its exploration activities in the second half of 2015.
Challenger has also dismissed suggestion that each onshore shale well could cost between $150-million and $200-million, explaining that such figures would be more applicable to offshore exploration wells.