Background
The discovery of a large field of gas condensate (a light crude oil) off the southern coast of South Africa by French oil major Total, has been lauded as a potential ‘game-changer’ for the energy-strapped country by President Cyril Ramaphosa. With an estimated value of one trillion rand ($99.4 billion) over a 20-year span, the find should provide a welcome boost to the economy.
Named “Brulpadda” (the Afrikaans word for bullfrog), the field is thought to contain as much as one billion barrels of oil equivalent. It lies 175 kilometres off the coast, in the Outeniqua Basin, at depths of up to 3,633 metres. Brulpadda is the first deepwater discovery to be made in South African waters. It is, as Total noted when announcing the discovery, located in ‘a challenging deepwater environment’. The waters of the Outeniqua Basin are indeed challenging, as they are prone to stormy conditions and high waves and range in depth from 200 to 1,800 metres.
Comment
Previous shallow-water drilling in South African waters has not been successful, so the Brulpadda find should, once developed, provide a significant boost to the country’s energy mix. The Brulpadda discovery is expected to generate further interest in South African waters, including, the government hopes, from the other oil majors.
The estimate of one billion barrels, if accurate – and recoverable – would be sufficient to supply South Africa’s six oil refineries for up to four years. If nothing else, it would certainly provide a welcome boost to the underutilised gas-to-liquids refinery at Mossel Bay.
For now, however, the next stage of the process will see Total conduct three-dimensional seismic tests on another four exploratory wells. If all goes well and the Brulpadda find is proven to be commercially viable, the extracted condensate will be sent to Mossel Bay for processing, before being used domestically. Long dependent on cheap coal, South Africa has relatively little gas-related infrastructure, so, if the numbers stack up, there is the potential for economic benefits to flow from the construction of more infrastructure to service an expanded gas industry.
The Ramaphosa Government has pledged to support oil and gas exploration to help reduce South Africa’s costly dependency on imported oil and, in the case of gas, as a cleaner alternative to coal. To that end, the government is drafting new legislation – the Upstream Petroleum (Oil and Gas) Bill – to further stimulate oil and gas exploration. It intends to implement industry-specific legislation unencumbered by the different circumstances that apply to the traditional, terrestrial mining industry.
Under the Gas Utilisation Master Plan and the final draft of the latest Integrated Resource Plan, the government intends to introduce a long-term energy strategy between 2018 and 2030. Under that strategy, the energy mix is to be supplemented by at least 3,126 megawatts of baseload gas-fired power generation. The Brulpadda find seems to have come at the right time.