Gas exploration in South Africa to yield fruitful results

2nd December 2011 By: Joanne Taylor

Significant gas-related developments are expected in South Africa in the coming years, as numerous new surveys have been conducted offshore in previously underexplored areas, reports exploration developer Petroleum Agency South Africa (Pasa).

Further, Pasa CEO Mthozami Xiphu says interest in the unconventional onshore gas potential of South Africa may allow for a diver- sification of the country’s energy production in the not-too-distant future.

Currently, in terms of onshore gas, there are 58 concessions and 65 applications for exploration rights in South Africa.

Xiphu says the most interesting onshore development is oil and gas company Molopo Energy’s application for production rights in Virginia, in the Free State. Molopo has negotia- ted a gas sales agreement with renewable-energy company Novo Energy for an initial sale of about 600 000 standard cubic feet a day of gas.

Should the rights be granted, they will be South Africa’s first onshore gas production rights. It is thought that the gas is biogenic gas, which may prove to be a renewable hydro- carbon energy source for years.

In the Karoo region, exploration activities in the central and southern parts of the main Karoo basin are focused on evaluating the basin’s shale gas potential, with a few companies possessing technical cooperation permits.

Engineering News reported in September that Mineral Resources Minister Susan Shabangu extended a moratorium on the issuance of exploration licences for unconventional gas in the arid Karoo region by a further six months to enable further policy and technical reviews.

Xiphu explains that the Karoo was explored in the 1960s and the 1970s, but owing to perceived poor potential for large conventional oil plays, exploration was abandoned.

“New interest in the area is driven by unconventional gas, mainly coal-bed methane and shale gas.”

Coal-bed methane exploration is concentrated on the coal-bearing sequences of the northern main Karoo basin and northern subbasins, and exploration in the Waterberg coalfields, in the Ellisras basin, is at the most advanced stage, with mining group Anglo Operations having already drilled more than 70 wells and conducted production tests.

Pasa estimates there to be about one-trillion cubic feet (tcf) of gas in the Ellisras basin and about five tcf in the Springbok Flats basin.

“We believe the potential shale gas resource in the Karoo basin is significant. The US Energy Information Administration has estimated a technically recoverable resource of 485 tcf, but we believe it to be 10% of this estimate,” says Xiphu.

Offshore Explorations

Currently, there are 14 offshore operators spread over 16 concessions and seven applications for offshore gas exploration rights, while interest in South Africa’s hydrocarbon resources has increased, he states.

Jurassic- (199-million years ago) to Cretaceous- (65-million years ago) aged basins exist along our coastline, with current produc- tion only taking place off the South Coast.

Further, in the northern sector of the Orange basin, on the West Coast, oil company PetroSA has just completed the initial stage of its exploration rights in Block 1.

“They have acquired a 1 500 km2 three- dimensional (3D) seismic survey and have completed the processing and interpretation of that survey,” says Xiphu.

Pasa estimates that the area has a potential gas resource at the multitrillion-cubic-foot level, with targets at the same stratigraphic level as the Kudu gasfield to the north and the Ibhubesi gasfield to the south.

Four companies have exploration rights on the West Coast, namely oil and gas companies Thombo Petroleum and Sungu Sungu Exploration, gas exploration company Forest Exploration International and diversified miner BHP Billiton.

Forest Exploration and its joint venture part- ners have completed the acquisition of a third round of 3D seismic testing over its Ibhubesi gasfield with the processing of a 710 km2 area in the south-western section of its block under way.

BHP Billiton has rights in shallow- and deep-water areas while Sungu Sungu Exploration has rights in the midbasin.

Further, rights applications for the deep water Orange basin and the southern Orange basin, from oil and gas companies Shell Exploration International and PetroSA, respectively, are yet to be approved.