The Rise of South Africa as Oil Nation
The Rise of South Africa as Oil Nation
By Jacob Aguomba
www.petroleumnewsngr.com
In the months ahead, South Africa will raise her voice loud and clear as an oil producing nation. A similar tone may also echo in neighboring Namibia, Ghana, the former gold coast and Cote d’Ivoire. It is by the force of nature that Africa has risen to tap into her mineral resources, uploading her presence in the global trade especially in the hydro carbon market, even as Nigerian gold exports have recently hit the billion dollar mark. Back in history, South Africa have surmounted multiple political upheavals to become a major economic power this side of the hemisphere, making Johannesburg an irresistible hub for finance and international business.
It is not for nothing that keen observers had begun to identify her as Africa’s deep leg in the Pacific Ocean; more perhaps, for her burgeoning tourism and resilient politics. Meanwhile, major oil companies are stumbling over themselves for the gas and condensate discovered in South Africa. Industry executives are jostling to obtain authorization to ply the of exploration fields in South Africa’s West Coast, the Northern Cape Ultra Deep Waters as well as South Outeniqua Basin oil blocks. In the past two years, oil majors including shell, Eni, Petronas and Total Energies have established their presence in the South African oil fields, drilling between them about 8 exploration wells successfully.
Still, while the discovery of large scale deposits of petroleum in the West and the Southern axis of Africa is expected to provide the much expected leverage for accelerated development in Africa, given the ever rising global demand for fossil fuel and all the assortments of residual by-products of crude oil, not unmindful of the huge financial returns that follow, observers have expressed concern over the environmental backlash that is usually associated with crude oil exploration and exploitation. Between 2022 and 2024, Total Energies, Shell and Galp have found oil across three blocks in Namibia’s Orange Basin. The find is about 3.5 billion barrels deposit while Gas and Condensate drilled in two exploration wells in blocks 11b/12b offshore in South Outeniqua Basin has brought a renewed confidence for investors to pursue a more concerted exploration in the fields.
When in 2022, Chevron, Shell and Petronas decided to quit their South African downstream operations, it became an opportunity for another oil major to take over the assets as the downstream oil sector remains attractive now and in the future even with the growing popularity of hybrid motor vehicles. These oil majors divested, not for lack of interest or profitability but for inadequate corporate responsibility and numerous law suits. Mainstreet has since picked up the pieces at bock 11b and 12b and has its books open for would- be partners. It is interesting that TotalEnergies is the major share holder in other blocks north of South Africa’s Orange Basin and a 100% shareholder in yet another block three times the size of blocks 11b and 12b in Southern Outeniqua basin.
Meanwhile, preparation works are on-going for exploration and drilling projects in South Africa’s Orange Deep Water Basin, TotalEnergies is operating additional 4blocks. Drilling authorization is also imminent for Northern Cape Ultra Deep Water blocks. There are also potentials for drilling in blocks 5,6 and 7 by year 2026 which targets large deposits of oil and gas.
Litigations
However, litigations has inexorably affected two major seismic surveys, one of which Shell abandoned and went on to discover oil and gas in Namibia while Eni left South Africa to discover large deposits of oil in Cote d’Ivoire. A measure of progress was recorded back in March this year by Searcher, a tech outfit in South Africa with the acquisition of 3D Seismic data which is said to enhance exploration of petroleum resources without harming the environment.
Meanwhile, there is the formidable issue of several litigations as host communities and environmental activists clamor for a meeting point between desirable, conducive business environment and health hazards implications for the people in the host environs whose livelihood is historically dependent on the aquatic life of the rivers, swamplands, rice and vegetable fields or other farmlands that oil exploration, exploitation and crude oil spillage would unavoidably destroy.
South Africa’s Petroleum Resources Minister Mr. Gwede Mantashe has emphasized that the discovery of oil in Southern Africa would translate to a solid foundation for accelerated development. One would expect that he was speaking, not only for South Africa but the rest of the continent. He spoke at the 30th Africa Oil Week held in the International Conference Centre, Cape Town. For other African oil nations where petroleum discovery and exploitation over the years has been more of a nightmare than economic windfall, now is the time for governments to eschew ribald corruption and rescue their populace from extreme poverty. And for those African nations to whom oil find means new wealth, the onus is to effectively utilize a lifetime opportunity. It would be very unAfrican to lose the fish and miss the boat at the same time.
