HomeNewsSA lifts moratorium on shale gas exploration

SA lifts moratorium on shale gas exploration

Example of a
fracking operation in
southwestern Pennsylvania
Cape Town, South Africa — 10 September 2012 – South Africa has lifted a moratorium on shale gas exploration in the semi-arid Karoo region, where the extraction technique of "fracking" might be used to tap into some of the world’s potentially largest stocks of the energy source.

Collins Chabane, minister in the President’s office, is quoted by Reuters as saying that the cabinet has decided to lift the moratorium, imposed in April last year, after a study eased safety concerns related to the controversial method.

“When the results of the study came back, they recommended that it was clearly safe for us to have that programme of exploration of shale gas,” Chabane told reporters.

According to an initial study commissioned by the U.S. energy information administration, South Africa has 485 trillion cubic feet of technically recoverable shale gas resources, most of which are located in the vast Karoo Basin.

The reserves, which would rank as the fifth largest among 32 countries included in the study, could be a long-term solution for the energy problems of Africa’s largest economy, which relies on coal to produce 85% of its electricity.

A revocation of the moratorium could benefit Royal Dutch Shell, Falcon Oil & Gas, Sunset Energy and Anglo American, the Eurasia political risk consultancy said earlier this year, adding the move could be “a game changer” for the South African economy.

Oil major Shell said last year that it hoped to invest US$200 million to explore for shale gas in the Karoo. And in November petrochemicals group Sasol put its shale gas exploration plans on hold, but said it would watch further developments.

South Africa last year imposed a fracking moratorium on oil and gas exploration licences in the Karoo region, to give time to study the potential gains and examine the concerns of environmentalists who say the process would ruin the area.

Source: Reuters Africa. For more information, click here.