South Africa, a country that has always been short of oil and is running out of its scant domestic supply of gas, is working to cut its reliance on imported fuels. Africa as a whole has seen an increase in drilling, with oil and gas rigs around the continent topping 100 in recent months, according to Baker Hughes data. The count was as low as 77 in 2017.
The discovery of South Africa’s first deep-water petroleum deposit, backed by a consortium that includes Canadian Natural Resource Ltd., may prompt a rush of activity offshore by competitors. The Brulpadda discovery is estimated at about 1 billion barrels by its operator Total ASA, which could be enough to supply South Africa’s refineries for almost four years.
The field of primarily gas-condensate — a light liquid hydrocarbon — was discovered about 175 kilometres off the country’s southern coast in the Outeniqua Basin. The area, where Exxon Mobil Corp. and Eni SpA also hold stakes, may now draw further interest, especially since South Africa is due to introduce new legislation later this year aimed at spurring exploration.
Block 11B/12B, covering an area of 19,000 square kilometers, is operated by Total with a 45 per cent working interest. Qatar Petroleum owns 25 per cent, Canadian Natural Resources International 20 per cent, and the remaining 10 per cent is controlled by Main Street, a South African consortium.
Minerals Minister Gwede Mantashe said the find “is potentially a major boost for the economy. We welcome it as we continue to seek investment.” President Cyril Ramaphosa is seeking to lure USD $100 billion of investments by 2023 to revive a struggling economy. The country’s energy supply is largely based on coal, while state power utility Eskom Holdings SOC Ltd. also runs turbines on costly diesel fuel. A failed exploration campaign in shallow waters has meant a gas-to-liquids refinery at Mossel Bay runs well below capacity.
The resource could be about three times the size of all South Africa’s gas finds to date, according to WoodMac’s Latham. Total, the operator of the licence, now plans to acquire 3D seismic data before drilling as many as four more exploration wells there, but it cautions that the operating environment offshore is tough. “The region is quite difficult to operate. Huge waves, the weather isn’t very easy,” said Total CEO Patrick Pouyanne.