Most Read Contributor in South Africa, September 2016
It was announced recently that Total intends to sell its South
African coal assets and step up its exploration for oil and gas in
South Africa. This announcement is of interest for a variety of
Until the recent advent of the shale gas saga, South
Africa's potential oil and gas reserves were always considered
insignificant compared with the country's other non-renewable
From a historical perspective, after almost a quarter of a
century of sporadic and fairly amateur terrestrial oil exploration
efforts that unearthed only negligible accumulations, the
government resolved in 1913 to heed the calls of the public and to
obtain the views of the best available overseas expert.
The person they turned to was Edward Hubert Cunningham Craig, a
Scottish geologist, who was furnished with the mandate of
"approving or disproving ... the theories of payable South
African oil deposits". His tour of South Africa failed to
uncover any noteworthy hydrocarbon accumulations and thus his final
report was a "devastating verdict (that) was a great
disappointment to the whole of SA".
Craig did, however, state as follows: "While I regret that
it has been necessary to give a gloomy view of many propositions,
where hard and careful prospecting work has been performed, I am
hopeful that my tour may not be without some results in turning the
attention of prospectors and capitalists to areas more worthy of
As hindsight has revealed, there are many areas in South Africa,
both onshore and offshore, that are worthy of exploration and,
ideally, as Craig said a century ago, "exploitation".
From an offshore perspective, it was not until three professors
from the University of Cape Town drew attention in 1964 to the
petroleum potential of South Africa's continental shelf that
the government reconsidered the possibility of significant
accumulations occurring within its jurisdiction.
However, it was not until the early 1990s that Mossgas produced
South Africa's first natural gas.
From an onshore perspective, the country is still waiting with
bated breath for shale-related exploration to be authorised in a
manner that will allow for an accurate estimate of South
Africa's potential shale gas reserves.
Although there are other onshore gas reserves, such as coal-bed
methane and biogenic methane, it is the so-called
"gamechanging" size of the potential shale gas reserves
that are of the greatest interest.
Although it is now trite to say that South Africa may be endowed
with some of the largest shale gas reserves in the world,
corresponding confidence regarding South Africa's potential
offshore resources has not yet garnered similar status.
The tide in this regard may, however, be turning in that the
stepping up of Total's oil and gas exploration will,
apparently, take place in the offshore arena.
When it comes to truly significant oil and gas companies (the
so-called super majors) showing an interest in South Africa's
offshore hydrocarbon potential, Total is not alone. South Africa
can now also boast the presence of Shell and ExxonMobil.
Consequently, it is reasonable to argue that three super majors
would not have invested in South Africa's offshore acreage
unless they were of the view that a noteworthy return on their
investments could be realised.
Notably, the super majors are joined in the offshore arena by a
fair number of other, smaller, oil and gas companies, such as
Silver Wave Energy, Impact Africa and Sasol Petroleum
Such has been the unprecedented interest in offshore acreage
that, in the past three years, nearly all such acreage has been
Under the circumstances, substantial exploration can be expected
to take place in South African waters within the next few years and
South Africa may soon reach the stage at which its oil and gas
reserves can no longer be labelled as insignificant.
This turning point in the story of South Africa's oil and
gas reserves may be closer than most South Africans realise and, in
view of the fact that Total is expected to drill the promising
Paddavissie and Brulpadda prospects during the course of this year,
Total may well end up playing a truly significant role in that
The decision by Total to sell its South African coal assets and
step up its oil and gas exploration could be a decision that pays
significant dividends in the near future and helps to rewrite the
story of the South African oil and gas industry.
Previously published in BDLive on 20 February 2014.
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The Honourable Minister of Mineral Resources, Ms Susan Shabangu, reinforced during her 2012 budget speech on 10 May 2012, amongst other things, that the Department of Mineral Resources (DMR) remains determined to continue issuing stoppage notices in terms of section 54 of the Mine Health and Safety Act, No. 29 of 1996 (MHSA) to ensure compliance with the MHSA.
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