The Petroleum Agency of South Africa (Pasa) has awarded hydrocarbon exploration licences totalling 30 132 km2 to six junior mining companies in a bid to help resolve the country’s energy crisis.
There has been very little hydrocarbon exploration activity onshore in South Africa when compared with offshore to date and this makes current exploratory efforts critical.
The licences cover exploratory wells in the Northern Cape, North West and Free State, with a total risked mean gross petroleum resource potential of 1.06-billion barrels of oil.
The awarding of exploration licences on a cumulative acreage of this size is a clear indication of the Department of Minerals’ and Pasa’s commitment to finding alternative sources of energy in the form of oil and gas, one of the junior companies, ORM Exploration, said in a statement issued this week.
“It is exciting, as it shows that exploration, particularly onshore, is getting the backing it deserves. And we are buoyed by the recent developments around liquefied natural gas prospects, as some of our assets lie adjacent to territories with known gas seepages,” said ORM Exploration MD Chris Dorrington.
He added that the company had spent ten months conducting preliminary research into identified anomalous areas with technical cooperation permits and that the results seemed promising so far.
The six licence recipients form part of venture capital company Alumni Energy Investments, a locally registered Section 12J fund.
Alumni Energy Investments CEO Shakes Motsilili noted that there were no onshore seismic or other data studies of any significance available to date and that the companies would be pioneering a big data approach to hydrocarbon exploration.
“This will be our primary focus for the three-year duration of the new licences. And it is important that we are able to do it at scale,” he added.
The exploration rights mean that Alumni Energy Investments can now perform on-the-ground activity, including taking soil samples and telluric analysis.
Should the data prove compelling enough, it is permitted to conduct exploratory drilling, subject to meeting environmental impact assessment criteria.
“This is going to require a significant exploration programme. It is a big step towards implementing what we hope will lead to a natural gas to electricity strategy in a relatively short timeframe.
“Such a large acreage has the potential to change the energy landscape should it lead to even a modest hydrocarbon find,” concluded Motsilili.