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South African Business 2021

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Welcome to the ninth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. This issue has a focus on economic recovery plans which have been put in place to tackle the challenges thrown up by the global Covid-19 pandemic. National government’s focus on infrastructure and the use of Special Economic Zones is highlighted, together with a feature on the nascent maritime economy. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com.

FOCUS A game-changer for

FOCUS A game-changer for South African oil and gas Light oil and gas condensate discoveries could be the start of something big off the Southern Cape coast. If the South African gas market is to take off and thrive, significant drilling has to take place. As the new CEO of Petroleum Agency SA, Dr Phindile Masangane, describes the situation: “That would be a game-changer for South Africa’s upstream oil and gas industry.” As it happens, a major discovery has been made at a site south-east of Mossel Bay called Brulpadda. Says Dr Masangane: “The recent discovery by Total and its JV partners in Block 11B/12B (Brulpadda) is the first giant step in that direction.” Odfjell’s Deepsea Stavanger semi-submersible oil rig relocated from Norway to South Africa in June 2020 to start exploratory drilling. The Luiperdpadda prospect where the rig is drilling is the second of five prospects in the group. With light oil and gas condensate having been found in the Brulpadda well, it is possible that other prospects will be found with this further drilling. Africa Energy holds a 4.9% effective interest in the Exploration Right for Block 11B/12B. The Company owns 49% of the shares in Main Street 1549 Proprietary Limited, which has a 10% participating interest in the block. Total as operator holds a 45% participating interest in Block 11B/12B, while Qatar Petroleum (25%) and CNRI (20%) are the other participants. The exploration drilling in Block 11B/12B is in deep waters similar to where the gigantic Mozambique Rovuma Basin gas discoveries were made in 2010. The drilling campaign has long-term benefits to South Africa which include introducing frontier deepwater (>1400m) exploration drilling, building confidence and potentially shifting petroleum exploration activities to private international oil companies (IOCs), de-risking deep-water acreage which is believed to be prospective for large oil and gas resources. This will encourage other IOCs to take risk in drilling deepwater prospects, which could result in the country discovering more oil and gas resources. In June 2020, the Block 11B/12B joint venture received the fast-track 3D seismic dataset from Petroleum Geo-Services ASA for the 2 305km² 3D seismic programme completed earlier in the year on the block. Initial interpretive work has identified a number of additional leads, including a potential northern extension to the Luiperd Prospect. When the Block 11B/12B JV receives the fully-processed 3D dataset it will then integrate the PGS data with the Polarcus 3D seismic data from 2019 in order to mature previously identified leads into prospects. “Further development of the discovery is highly dependent on the success of this further drilling,” comments Dr Masangane. “Possible development could see condensate being piped to the PetroSA facility in Mossel Bay,” she adds, “but these decisions are ultimately up to the operator, Total and its partners.” SOUTH AFRICAN BUSINESS 2021 SOUTH AFRICAN BUSINESS 2021 64 34

FOCUS Petroleum Agency SA: promoting and regulating exploration and production. Petroleum Agency SA evaluates, promotes and regulates oil and gas exploration as well as related production activities in South Africa, in addition to archiving 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 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, she 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. ■ 65 SOUTH AFRICAN BUSINESS 2021

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