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Page added on February 11, 2019

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South Africa Oil Discovery Could Be A Game-Changer

Geology

One of the promising hotspots for oil and gas exploration drilling this year – South Africa’s offshore – has just yielded a massive natural gas and condensate find that could open a new exploration province for oil majors and change the energy fortunes of South Africa.

France’s major Total said this week that it had made a significant discovery on the Brulpadda prospects off the southern coast of South Africa.

“With this discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” said Kevin McLachlan, Senior Vice President Exploration at Total.

According to Total’s chief executive Patrick Pouyanne, the discovery could hold 1 billion barrels of oil equivalent of gas and condensate resources.

The operator of the license, Total, and its partners Qatar Petroleum, CNR International, and South African consortium Main Street, now plan to acquire 3D seismic data this year, followed by up to four exploration wells on the license.

“It is exciting for our country that this discovery has been made. It is potentially a major boost for the economy, and we welcome it as we continue to seek investment to grow our economy,” South Africa’s Mineral Resources Minister Gwede Mantashe said, commenting on the major gas discovery.

The African Energy Chamber (AEC) also hailed the first major deepwater discovery off South Africa, saying, “This is a great first step for the country which still relies on imports of oil and gas despite the great reserves believed to be in its soil and waters.”

According to AEC, the discovery could change the course of South Africa’s economy and help to reduce the country’s dependence on oil and natural gas imports.

“The oil industry hopes this will be a catalyst and encouragement for all policy makers to work on an enabling business environment for exploration and drilling activities in South Africa,” NJ Ayuk, Executive Chairman at the Chamber, said.

South Africa is currently working on new legislation that would separate the conditions for exploring and exploiting oil and gas resources from those for traditional minerals.

Commenting on Total’s discovery, Andrew Latham, vice president, global exploration at natural resources consultancy Wood Mackenzie, said:

“Even though the well isn’t an oil discovery, if Brulpadda proves to be anywhere near as big as the estimates of up to 1 billion barrels of oil equivalent resources, it will still be a game-changer for South Africa.”

Although the difficult deepwater environment could pose a challenge, the difficulties may be similar to those present in the West of Shetland in the UK North Sea—a region that Total knows well and in which it has experience, Latham noted.

In terms of the discovery’s potential to meet South Africa’s gas demand, WoodMac’s Akif Chaudhry, principal analyst, commodity analytics, said:

“While a strong case can be made for the development of the gas economy, long-term growth requires a clear plan from government.”

While South Africa is currently drafting new legislation on oil and gas resource development, the offshore regions around the whole African continent has recently seen growing interestfrom oil and gas majors willing to explore what they believe is the next exploration hotspot in the world. BP and Shell are expanding their African presence, while ExxonMobil is focusing on western and southern Africa, amassing stakes in prospects in Ghana, Mauritania, Namibia, and South Africa, hoping to strike a discovery containing no less than a billion barrels of crude, also known as an elephant.

South Africa was one of the hotspots of promising exploration drilling that WoodMac had identified for this year, alongside Guyana, Brazil, Mexico, the U.S. Gulf of Mexico, Cyprus, and the Barents Sea in Norway.

Total’s major deepwater discovery offshore South Africa is now opening a potential new wave of majors drilling in the area, hoping to find the next billion-barrel discovery.

Oilprice.com



15 Comments on "South Africa Oil Discovery Could Be A Game-Changer"

  1. Duncan Idaho on Mon, 11th Feb 2019 9:56 am 

    Yep, light oil.
    Little diesel—
    Unfortunately, the world runs on diesel.
    But good for SA—-

  2. AirlinePilot on Mon, 11th Feb 2019 10:02 am 

    How about we try a different title? Something along the lines of….

    “South Africa Gas and Condensate discovery could be a game changer”

    I quote….

    “Even though the well isn’t an oil discovery, if Brulpadda proves to be anywhere near as big as the estimates of up to 1 billion barrels of oil equivalent resources, it will still be a game-changer for South Africa.”

    Other websites this am are calling it an oil discovery. It is not.

  3. Sunspot on Mon, 11th Feb 2019 2:31 pm 

    Big deal. The world uses over 30 billion barrels of oil a year. If they eventually get a billion barrels – overstating the potential of discoveries is a tradition, especially in these days after Peak Oil. And however much they eventually get, it will take decades to get it all. So it isn’t a “game-changer” for the world, or even for South Africa. A few people will get rich off it, that’s all.

  4. Cloggie on Mon, 11th Feb 2019 3:59 pm 

    Yeah how much of that billion would be recoverable and how bout it’s eroei not to mention if it really is there how long till it at production stage. Meh another fluff piece from oily price.com. To swindle some investors probably.

  5. twocats on Mon, 11th Feb 2019 7:34 pm 

    Just doing a quick search, SA is extremely oil poor, and imports 75% of its gas, mostly by pipeline from Mozambique.

    my quick math converts 1 boe to 5.8 TCF gas, which would be about 48 years of gas consumption at current levels. Even if they got half that – they are well into peak oil decline and still have gas for agriculture, heating, pumping water from aquifers, etc.

  6. makati1 on Mon, 11th Feb 2019 7:34 pm 

    A lot of “ifs” and “maybes” that are not likely to happen. If they do they are years away and too much can change in those years. An ad to keep the suckers/investors on board for a few more days.

    World oil use in 2018 = ~36,500,000,000 barrels. (~100,000,000 bbls/day)

    https://en.wikipedia.org/wiki/List_of_countries_by_oil_consumption

    1,000,000,000 bbls = 10 days worth of oily stuff.

    Shows desperation when that is a huge deal. Sign of the declining times…

  7. makati1 on Mon, 11th Feb 2019 8:34 pm 

    twocats, you are correct, IF it is usable/recoverable at a profit. And, IF there is time to develop the field before the SHTF and ends a lot of dreams. We shall see.

  8. KM32 on Mon, 11th Feb 2019 10:21 pm 

    So many doomers on this site, all these years later. It’s a potential game changer for South Africa, which is the point of the article. A half century of gas for the country from one discovery. I don’t know why people try to crap all over it and claim it is something it’s not pretending to be.

  9. makati1 on Mon, 11th Feb 2019 10:37 pm 

    KM32, it is not likely to happen the way you/they want it too. I would like to see ALL of Africa throw off ALL of the western countries that have enslaved it for centuries. THEN, it may have a chance to improve and have a decent lifestyle for all of its people. Unfortunately, Africa has too many resources the West wants, and will take, even at the point of a gun.

    “BP and Shell are expanding their African presence, while ExxonMobil is focusing on western and southern Africa, amassing stakes in prospects in Ghana, Mauritania, Namibia, and South Africa…”

    The Western vultures are already circling and will leave little for the actual Africans to enjoy.

    Doomers see what is happening and what is coming. We do not look at the world thru rose colored glasses or blinders. We are trying to prepare, not deny. The “news” is full of “what ifs” and “maybes” because, to show reality would only speed the coming SHTF event. If everyone saw what is coming and suddenly stopped buying anything but necessities, the sudden crash would end BAU forever. Better the crash is a gradual slide to the bottom, I think. But then, I have no say over events. I just watch them and prepare.

  10. Keith McClary on Mon, 11th Feb 2019 11:43 pm 

    What’s the big deal? They find billion barrel fields all the time. Just ask Mr. copious abundance. (Whatever happened to him?)

  11. Davy on Tue, 12th Feb 2019 4:31 am 

    “I don’t know why people try to crap all over it and claim it is something it’s not pretending to be.”

    Negativity is the intellectual current here. This forum is a negative place with negative people. Fossil fuels are especially a negative focus. They are attacked because of peak oil dynamics and climate concerns. There is then the techno optimist with their cornucopian platforms. These people are negative people also pushing the positive. Their positive is often just fantasy. Pretty screwed up place, huh. LOL.

  12. Free Speech Message Board on Tue, 12th Feb 2019 4:49 am 

    What if rap, country, and rock music was really garbage now and the only reason people like it is that the elites keep pushing it to keep the 99% brainwashed and distracted by bread and circuses?

    Does anyone find the fact that every song is about sex instead of morals, war, debt, and tyranny to be a bit odd?

  13. deadly on Tue, 12th Feb 2019 5:33 am 

    Who cares if people are consuming one hundred million barrels of oil each day?

    It is what they do and they’re good at it.

    There is always more oil somewhere.

    The sun is always shining on half of the earth at all times, so there is really nothing to worry about as long as the sun remains lit.

    Think of all of the poor people in Saudi Arabia and how they are going to get by.

    Think of the children.

    Think about them taking your boat.

  14. Davy on Tue, 12th Feb 2019 6:07 am 

    “This Is Just The Beginning Of Europe’s Gas War”
    https://tinyurl.com/yxl68jbx

    “Russian gas giant Gazprom said it’s looking to gain an even larger gas market share in Europe following record-high 2018 exports, as it expects a decline in Europe’s gas output combined with rising demand. Last year Gazprom sold more than 200 billion cubic meters (bcm) of natural gas to Europe, including Turkey, while its gas market share in the region rose to more than a third, Reuters said in a report on the matter.”

    “EU gas production is projected to spiral downward over the next 12 years. Regardless of possible development of non-traditional gas resources, production will decline by 43% against the 2013 level, Russia’s National Energy Security Fund (NESF) said recently. Moreover, the Paris-based International Energy Agency (IEA) forecasts that EU gas production will halve by 2040. This dwindling production also comes as a number of EU states are poised to break away from over-reliance on both nuclear and coal needed for power generation, leaving opportunities for renewables, particularly solar and wind power, as well as liquefied natural gas (LNG) imports. However, all of these sources will take more time and funding to develop before they can add a more significant percentage of the bloc’s energy mix going forward.”

    “Moreover, competing for more gas market share in Europe will see both geopolitical and energy stakes increase, pitting Russian piped gas exports, but also more LNG, as the country develops its LNG sector, against higher priced U.S. and Qatari LNG. Meanwhile, Qatar (the global LNG export leader and the U.S. which will soon be the third largest LNG exporter) could agree to tie-ups in LNG, both for economic and geopolitical motivations in the mid to long term. Qatar is already investing heavily in the U.S. LNG sector as a pure diversification play as U.S. production begins to take off, competing for both European and Asian market share. The Asia-Pacific region accounts for 72 percent of global LNG demand, with that amount projected to increase to 75 percent amid rampant Chinese LNG demand.”

  15. Davy on Tue, 12th Feb 2019 6:29 am 

    “Russia’s Exports Continue To Defy US Sanctions”
    https://tinyurl.com/y69ceqak

    “Russia is winning its war of attrition against aggressive U.S. sanctions policy. Diplomatically, Russia is winning on all fronts, finding positive solutions through its abundant energy reserves to open gaps in relationships hat have been frozen in geopolitical amber for two generations.”

    “I’ve covered the surprising stability of the Russian ruble over the past six months given the volatility in oil prices in the past. That stability is key to the future of central Asia as well as eastern Europe. Putin is positioning Russia and the ruble as the glue which ties central Asia’s development together through the Eurasian Economic Union. So, it and Russia’s economy defying the best efforts of the U.S. to impede its growth is something to keep watch on.”

    “The takeaway here is that Russia’s export economy is showing signs of decoupling from oil.And they have the U.S.’s short-sighted use of sanctions to thank for it. It’s also underscoring the strength of Russian/Chinese trade which grew another 30% to $107 billion in 2018 after nearly 21% growth in 2017.”

    “But it has been Putin’s insistence on diplomacy that has assisted this export boom for his country. Japan is now making serious noises about signing a peace treaty to take advantage of Russia’s energy projects nearby.”

    “That’s why Russia’s exports are booming and why in the long run Putin can wait for the U.S. to regain its senses and come to him. Or not. There are plenty of other potential partners.”

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