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Opportunity Issue 99

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Opportunity magazine is a niche business-to-business publication that explores various investment opportunities within Southern Africa’s economic sectors and looks to provide its readers with first-hand knowledge about South African business. Opportunity also looks to present South African business to international markets that may have interests in investing in South Africa. The publication is endorsed by the South African Chamber of Commerce and Industry (SACCI).

OIL AND GAS South

OIL AND GAS South Africa’s road to net zero emissions will be via gas Petroleum Agency South Africa CEO, Dr Phindile Masangane, outlines the vital role that gas can play in driving South Africa’s economic recovery and in ensuring a transition to a clean energy future. Today the biggest threat to humanity is climate change and the biggest threat to South Africa’s social stability is the high unemployment rate, which has primarily been caused by economic stagnation. As the global economy recovers from the devastating effects of Covid-19, demand for oil and gas has gone up significantly. If there was ever a need for proof that oil and gas still drive the global economy, recent statistics demonstrate the trend. The world’s developed economies industrialised on the back of oil and gas production and use. Now, just as Africa is on the cusp of being a significant gas producer and is making plans to use such gas for power generation, industrialisation and economic growth, the negative effect of greenhouse gas emissions on the environment has become undeniable. The urgency for action to mitigate the risk of climate change is no longer debatable. Between 1990 and 2018 the top five emitters have produced more than 50% of greenhouse gas emissions. During the same period South Africa has contributed 1% to global emissions. This is by no measure insignificant, and as a responsible global citizen South Africa must take steps to reduce its carbon footprint. The UN Framework Convention on Climate Change was established in 1992 to coordinate the global response to mitigate the threat of climate change, and specifically to get countries to commit to policies and plans that will ensure that the average global temperature rise is kept less than 1.5°C above pre-industrial levels. The International Energy Agency (IEA) proposes that to achieve this goal the world’s energy sector must reach net zero emissions by 2050. In its global energy net zero 2050 pathway, the IEA acknowledges that there is no single pathway to this goal, as developed and developing countries face different socioeconomic challenges and have contributed disproportionately to greenhouse gas emissions to date. Country-specific pathways What a number of environmental interest groups seem to be ignoring in the IEA “Net Zero by 2050" report is the acknowledgment that there will be a differentiated approach to a clean energy future, taking into 12 | www.opportunityonline.co.za

OIL AND GAS _________________ The International Energy Agency has acknowledged that there will be different paths to clean energy. ________________ VALUE STATEMENT Petroleum Agency SA aspires to be a worldclass organisation, committed to: • Professional excellence • Integrity • Direct, open, consultative communication • Transparency • Respect • Teamwork • Active regard for our natural environment • Corporate social responsibility in an empowering, vibrant workplace where diversity is valued. MISSION To promote, facilitate and regulate exploration and sustainable development of oil and gas contributing to energy security in South Africa. VISION A diverse upstream industry contributing to energy security through sustainable growth in exploration and development of oil and gas. consideration the cost of the new clean energy technologies and the economic consequences of transitioning for each country. The IEA emphasises that each country must develop its own pathway to a net zero emission future. South Africa’s economy has been predominantly powered by coal, which is also a significant contributor to the country’s economy in terms of GDP as well as employment. Of all primary energy resources coal is the most carbonintensive, and South Africa therefore has a relatively high carbon-intensive economy, contributing about 1% of annual global greenhouse gas emissions. The use of coal produces fine particulate matter that affects people’s respiratory systems. In addition to coal, South Africa imports oil, gas and petroleum products for its energy needs as the upstream petroleum industry is still at a nascent stage. The two recent world-class gas discoveries in the Outeniqua basin off the south coast of the country are the biggest petroleum discoveries made in South Africa. The development of these discoveries has the potential to replace more than 2 300MW of diesel-fired electricity generation in Gourikwa, Dedisa and Ankerlig, thereby reducing the carbon emissions from these plants by more than 50% while eliminating sulphur oxide and nitrogen oxide emissions, which are also harmful to the environment. Gas is therefore an obvious bridge to a lower carbon future in South Africa. Importantly, these gas discoveries could restore the gas-to-liquid refinery www.opportunityonline.co.za | 13

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