February 8, 2019—The recent discovery of natural gas deposits off the South African coast could quicken the government’s efforts to revise and finalise a policy to oversee the sector.
“The oil industry hopes this will be a catalyst and encouragement for all policy makers to work on an enabling business environment for exploration and drilling activities in South Africa,” NJ Ayuk, the Executive Chairman of the African Energy Chamber said on Thursday.
Traces of gas have been discovered off the southern tip of the country in a block being explored by Total, the French resource giant.
The African Energy Chamber thinks the find will help open a new hydrocarbons province in South Africa, could prove the presence of billions of barrels of oil equivalent in South African waters, which will undoubtedly change the course of the country’s economy and help reduce dependency on imports.
Ayuk said, “We believe South Africa holds the potential for many more such discoveries, and the time has come to have a meaningful conversation on local content development so the development of the industry benefits all South African workers and contractors across the value-chain and creates jobs for the communities.”
The gas discovery is a timely one as the South African government is currently working on a new legislation separating oil and gas from traditional minerals, and has released last year a new Integrated Resource Plan (IRP 2018) which ambitions to install an additional 8,100MW of gas-to-power capacity in South Africa by 2030.
“Oil companies want to see leadership and sound governance wherever they invest,” added NJ Ayuk. “With South Africa demonstrating a commitment to reforms and the creation of an enabling environment for business, the oil industry is confident that the country can attract the investment needed,” Ayuk said.
Since being appointed Energy Minister in 2018, Jeff Radebe has been leading a strong South African outreach to oil markets in Africa like Nigeria, Equatorial Guinea, Angola, South Sudan, many middle eastern producers and attending meetings of the Organization of Petroleum Exporting Countries (OPEC) in Vienna and seeking deals for state-owned South African companies such as the Central Energy Fund and PetroSA.