South Africa’s Deep Waters Hold Significant Potential for Oil and Gas, Minister Says
Mineral and Petroleum Resources Minister Gwede Mantashe has highlighted the potential of South Africa’s underexplored deep waters for oil and gas discoveries. Speaking at the Africa Oil Week in Cape Town, Mantashe emphasized that the recent discoveries of gas and condensate from two exploration wells in the South Outeniqua Basin are proof of the country’s significant potential for oil and gas.
The Minister noted that in the past two years, TotalEnergies, Shell, and Galp have made eight discoveries across three blocks in Namibia’s Orange Basin, representing an estimated 3.5 billion barrels of potentially recoverable oil. These discoveries have sparked huge interest among major petroleum companies, with many believing that the Namibian discoveries may be extending southwards into South Africa.
Mantashe also commented on the withdrawal of TotalEnergies from offshore Block 11B/12B and 5/6/7, stating that development on the block remains viable. He emphasized that there is a good potential for other oil and gas players to partner with the remaining operator, MainStreet, and develop the block.
The Minister highlighted several exploration projects in the South African Orange Basin that are "gearing up for development", including preparation work for drilling exploration of the Deep-Water Orange Basis block operated by TotalEnergies, proposed drilling of an exploration well in Block 3B/4B, and environmental authorisation processes for drilling in the Northern Cape Ultra-Deep-Water Block.
However, Mantashe also acknowledged the risk of litigation against exploration and production, citing the examples of Shell and ENI, which abandoned their seismic surveys and went on to discover oil and gas in Namibia and CĂ´te d’Ivoire, respectively.
The Minister also touched on the approval by the Competition Commission of the government’s acquisition of the SAPREF refinery in Durban, which he said would guarantee sufficient supply of petroleum products in the period where several refineries have been shut down prematurely. He also highlighted the opportunity for another investor or major oil company to take over the assets in the downstream sector, which will remain attractive in the foreseeable future given the rise of hybrid vehicles.
Mantashe concluded by appealing to the delegates at the conference and the investment community to continue investing in the development of oil and gas to enable a prosperous energy outlook for Africa and promote sustainable development.
