News

Brulpadda to boost Ramaphosa’s investment drive

LONDON — Now who could have thought that a bull frog could cause such excitement. Judging from the comments about Total SA’s deep-water gas find, investors are now sitting up to the possibility of investing into South Africa as they have smelt the whiff of gas and oil. Perhaps it could start an ‘oil rush’ similar to the gold rush in 1886 as offshore competitors descend on South Arica. Explorers have described the Brulpadda find, estimated at 1bn barrels as “really transformational” and “catalytic”. Mineral Resources Minister Gwede Mantashe saw the potential to boost President Cyril Ramaphosa’s quest to lure $100bn of investments to South Africa by 2023 saying, “We welcome it as we continue to seek investment.” The area where the discovery was made is described as difficult with huge waves, but when has that put South Africans off. – Linda van Tilburg

By Paul Burkhardt

(Bloomberg) – South Africa’s first deep-water discovery, reported Thursday by French oil major Total SA, may prompt a rush of activity offshore by competitors as the country works to cut its reliance on imported fuels.

The Brulpadda find, estimated at about 1bn barrels by Total Chief Executive Officer Patrick Pouyanne, could be enough to supply South Africa’s refineries for almost four years. That’s a boon for a country that has always been short of oil and is running out of its scant domestic supply of gas.

“It is really transformational,’’ Andrew Latham, vice president of global exploration at consultant Wood MacKenzie Ltd., said Thursday. “This could be a discovery that kickstarts a bit of a gas strategy for South Africa.’’

READ  Harry Dent: Bitcoin Should Reach $32,000 IF Stocks Have Final Blow-off Rally (as expected)

The field of primarily gas-condensate – a light liquid hydrocarbon – was discovered about 175 kilometres (109 miles) off the country’s southern coast in the Outeniqua Basin. The area, where Exxon Mobil Corp. and Eni SpA also hold stakes, may now draw further interest, especially since South Africa is due to introduce new legislation later this year aimed at spurring exploration.

The find “is potentially a major boost for the economy,” Minerals Minister Gwede Mantashe said. “We welcome it as we continue to seek investment.”

‘Catalytic find’

President Cyril Ramaphosa is seeking to lure $100bn of investments by 2023 to revive a struggling economy. The country’s energy supply is largely based on coal, while state power utility Eskom Holdings SOC Ltd. also runs turbines on costly diesel fuel. A failed exploration campaign in shallow waters has meant a gas-to-liquids refinery at Mossel Bay runs well below capacity.

Total’s discovery is a “catalytic find” for the country, said Niall Kramer, chief executive officer of the South African Oil & Gas Alliance, an industry lobby group. “There’s nothing that has been on this kind of scale.”

The resource could be about three times the size of all South Africa’s gas finds to date, according to WoodMac’s Latham. Total, the operator of the license, now plans to acquire 3D seismic data before drilling as many as four more exploration wells there. But it cautions that the operating environment offshore is tough.

“The region is quite difficult to operate,” Pouyanne said on a conference call. “Huge waves, the weather isn’t very easy.”

READ  Steinhoff Update: Wiese loses R70bn bet as global banks sell him out, take huge losses

Africa as a whole has seen an increase in drilling, with oil and gas rigs around the continent topping 100 in recent months, according to Baker Hughes data. The count was as low as 77 in 2017.

Total has a 45% working interest in Block 11b/12B, Qatar Petroleum holds 25%, CNR International 20 percent and Main Street, a South African consortium, 10%.

Source: biznews.com

Visited 28 times