FOCUS South
FOCUS South African oil and gas is ready to compete Recent light oil and gas condensate discoveries have the potential to turbo-charge the sector. Significant discoveries have been made off South Africa’s south-eastern coastline by Total and its investment partners. Drilling activity such as this could be the kickstart that makes South Africa’s oil and gas sector a major player in the African market. In successive years, Total and its partners had great news: gas condensate was found in 2019 at a site called Brulpadda off the coast of Mossel Bay and in 2020, the nearby Luiperd prospect in Block 11B/12B delivered more good results. The block, in the Outeniqua Basin 175km off the southern coast, covers an area of about 19 000km² in water depths of 200-1 800m. The exploration was done by the semi-submersible rig Deepsea Stavanger, which journeyed twice from Norway to lead the exploration projects. The two finds raise the odds of Total investing in what it calls a “world-class” offshore gas site. The drilling campaign employed 195 South Africans with specialist skills but the potential spinoff is enormous if the find leads to drilling and commercialisation. The new CEO of Petroleum Agency SA, Dr Phindile Masangane, describes the prospect of regular drilling operations off the South African coast as, “A game-changer for South Africa’s upstream oil and gas industry.” Natural gas lies also lies offshore to the west of South Africa in the Atlantic Ocean (Ibhubesi). Block 2A of the Ibhubesi gas field north-west of Saldanha is estimated to have reserves of 850-billion cubic feet of gas. If Total goes ahead with further investments, the PetroSA GTL refinery at Mossel Bay (Mossgas) could be revived and the idea of creating a gas market in South Africa would get a massive boost and the country’s four Special Economic Zones (SEZs) at ports would become critical to its utilisation. A Gas Utilisation Master Plan (GUMP) is being developed as a part of national energy policy and private companies are responding to this changing environment. The major economic sectors currently using gas are the metals sector and the chemical, pulp and paper sector. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. The longterm prospects for shipping and oil and gas have persuaded national government to pursue Operation Phakisa (with a strong maritime focus) and for Transnet National Ports Authority to spend R2.5-billion on new equipment at South Africa’s eight ports in 2019/20. At the Richards Bay Special Economic Zone (RBSEZ) a feasibility study is being done on a gas-to-power plant and a large liquid petroleum gas import and storage terminal was recently built for Petredec by Bidvest Tank Terminals. AFRICAN BUSINESS 2021 20
FOCUS Petroleum Agency SA: promoting and regulating exploration and production. Petroleum Agency SA evaluates, promotes and regulates oil and gas exploration and production activities in South Africa and archives all relevant geotechnical data. The Agency acts as an advisor to the government and carries out special projects at the request of the Minister of Mineral Resources and Energy. South Africa’s energy mix is changing to include more gas through importing liquefied natural gas (LNG), using shale gas if reserves prove commercial, and developing infrastructure for the import of LNG. Petroleum Agency SA plays an important role in developing South Africa’s gas market by attracting qualified and competent companies to explore for gas. Another major focus is increasing the inclusion of historically disadvantaged South African-owned entities in the upstream industry. Currently, natural gas supplies just 3% of South Africa’s primary energy. A significant challenge facing the development of a major gas market is the dominance of coal. Opportunities for gas lie in the realisation of South Africa’s National Development Plan (NDP) and the Integrated Resource Plan (IRP). As custodian, Petroleum Agency SA ensures that companies applying for gas rights are vetted to make sure they are financially qualified and technically capable, as well having a good environmental track record. Oil and gas exploration requires enormous capital outlay and can represent a risk to workers, communities and the environment. Applicants are therefore required to prove their capabilities and safety record and must carry insurance for environmental rehabilitation. ■ Contact details Tel: +27 21 938 3500 Email: plu@petroleumagencysa.com Website: www.petroleumagency.com PASA’S NEW CEO HAS A BACKGROUND IN ENERGY POLICY AND STRATEGY Dr Phindile Masangane was appointed as the CEO of the South African upstream oil and gas regulatory authority, Petroleum Agency South Africa, in May 2020. Before then, Dr Masangane was an executive at the South African state-owned energy company, CEF (SOC) Ltd, which is the holding company of PASA. Dr Masangane was responsible for clean, renewable and alternative energy projects. In partnership with private companies, she led the development of energy projects including the deal structuring, project economic modelling and financing on behalf of the CEF Group of Companies. Her responsibilities also included supporting the national government in developing energy policy and regulations for diversifying the country’s energy mix. In 2019, Dr Masangane was Head of Strategy for the CEF Group of Companies where she led the development of the group’s long-term strategic plan, Vision 2040+ as well as the group’s gas strategy. From 2010 to 2013, Dr Masangane was a partner and director at KPMG, responsible for the Energy Advisory Division. She successfully led the capital raising of -billion for hydro and coal power plants expansion programmes of the Zimbabwean power utility, ZESA/ZPC. An alumnus of three universities, Dr Masangane has a BSc (mathematics and chemistry) from the University of Swaziland, a PhD in Chemistry from Imperial College, London and an MBA from the University of the Witwatersrand. ■
