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Service Issue 81

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Service magazine addresses key issues related to government leadership and service delivery in South Africa.

S energy security SOUTH

S energy security SOUTH AFRICA CAN ACHIEVE ENERGY SECURITY Petroleum Agency South Africa is licensing exploration in pursuit of the goal of energy security. PPetroleum Agency South Africa (PASA) strongly believes that the development of indigenous hydrocarbons, and especially gas, has a role to play in building South Africa’s economy and in facilitating a just transition to new energy sources. A recent report published by the International Energy Association (IEA) argues against framing the debate in that way. Both can and should be used, according to Africa Energy Outlook 2022. A key factor in allowing Africa to continue to industrialise will be an uptick in the discovery and use of gas. If all the gas so far discovered in and off Africa was used, the continent’s share of global emissions would rise by 0.5% to 3.5%. The enactment of the Upstream Petroleum Resources Development (UPRD) bill by the South African parliament will put PASA in a stronger position to attract further investment in the upstream sector. The Agency is preparing for this by constantly evaluating prospectivity and preparing for future licensing rounds and new data acquisition. The bill will change the main mechanism for granting exploration licences to an invitation-to-bid or licence-round system, as opposed to the current direct application method. This will improve PASA’s ability to manage the allocation of exploration acreage, making it more accessible, inclusive and equitable. The bill will also improve the regulator’s ability to control acreage relinquishment. This will improve the availability of exploration opportunities. If South Africa can increase its own energy resources and at the same time expand the type of resources being exploited (for example, natural gas) so that there is more flexibility in supply, the country will be able to wean itself off imports and move closer to energy security. If energy independence or something approaching independence could be achieved, there would be obvious consequences for stability and economic growth. From a legislative and government perspective, there is support for prospecting for new resources. The Minister of Mineral Resources and Energy, Gwede Mantashe, has argued that South Africa’s indigenous oil and gas resources must have a role to play in South Africa’s future energy mix.In addition, President Cyril Ramaphosa is paving the way for independent power production is likely to give a major boost to investment in developing gas discoveries for electricity generation. POSITIVE FINDS The large Brulpadda and Luiperd discoveries made by TotalEnergies and their partners in the last few years have opened up a worldclass hydrocarbon play in the deep ocean off South Africa’s south coast. These discoveries are extremely encouraging and all evidence suggests far more potential in the area. In the first week of September 2022, TotalEnergies applied to PASA for production rights for most of the area where their prospecting had been successful. In addition, the recent successes offshore Namibia are extremely significant and encouraging for South Africa as the same geological 6 | Service magazine Countries with energy security or independence have an advantage in terms of stability and the potential for economic growth. Credit: Shutterstock

energy security S Renergen, through its subsidiary Tetra4, is the only holder of an onshore petroleum production licence issued by the Department of Mineral Resources and Energy through PASA. The massive resources of natural gas that Renergen has been working on for the last few years reached commercial production in October 2022 in the northern Free State. sedimentary basin continues into South African territory, extending from the border with Namibia to offshore Cape Town and far out to sea, comprising an area of over 160 000 square kilometres. Shell holds exploration acreage in the South African southern sector of the basin together with partners TotalEnergies and PetroSA. TotalEnergies holds further acreage in the South Africa sector of the Orange Basin with partners Sezigyn in ER343 and Impact Africa in ER335. To the east and north-east of these blocks is ER339 where Eco Atlantic holds an interest. ADDRESSING ENVIRONMENTAL CONCERNS A major issue affecting existing investors is the current public negativity towards any activity related to oil and gas exploration. Together with the Department of Mineral Resources and Energy (DMRE), PASA is doing its utmost to educate and inform the public of the many potential benefits that exploitation of indigenous oil and gas resources could bring. There is currently a major series of public consultation and engagement initiatives underway to achieve this. This included a series of meeting that were held during 2022 and culminated in a joint DMRE, PASA and Department of Forestry, Fisheries and the Environment (DFFE) colloquium. At this event, environmental impact considerations of upstream oil and gas activities were comprehensively discussed. In a television interview broadcast from the African Mining Indaba held in 2022, PASA CEO Dr Phindile Masangane said the following about seismic surveys, the environment and economic growth: We acknowledge that exploration and production of oil and gas entails risks to our environment but technology has advanced and South Africa has adopted those technological advancements that help us to minimise the risk to our environment. What does this exploration entail? A lot has been said about seismic surveys in the media. Seismic surveys are actually a very old technology that has been used and it is now a mature technology, to make sure that the impact on our marine ecosystem is minimised. There is also a big misconception in the public that these seismic surveys are purely for the oil and gas industry. As there is pushback on seismic surveys, we must be careful as a country to note that this technology is used not just for oil and gas. It is actually used to define our maritime borders and it is used in other countries for offshore wind technologies. What do these seismic surveys entail? This is literally the releasing of pressurised air into our seabed and then we collect the signal as the sound bounces back into the bottom of the ship. That’s what helps us to collect data to know where the oil and gas is located underneath the seabed. In terms of other technologies, for example offshore wind, they know from the data where to locate the wind turbines on the seabed because they know what the geological subsurface looks like and they know which are the points where the wind turbines can be constructed. It is a very, very useful technology. The impacts are well known and there are mitigation measure that can be used to minimise those impacts. S Service magazine | 7

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