As Africa's energy demand continues to rise, it is believed shale gas might be a good opportunity for the continent.
Here we show you the key facts about shale gas developments in South Africa:
- The main shale reserves are in the Karoo Basin in central and southern South Africa. The Basin is large 400,000 sq km and covers 40% of the country
- The government supports fracking activities "for the benefit of the economy". The trade and industry minister Rob Davies said exploratory activities in the Karoo should start before elections in April next year (The Guardian)
- Mr Davis described shale gas as "a very significant game-changer in terms of the energy situation in South Africa" (The Guardian)
- Some protests against fracking have already taken place in the area as activists claim fracking may damage the stunning landscape of the Karoo
- Activists are also concerned about water contamination and water management as the Karoo is a particularly dry area
- Although no exploration permits have been issued yet, numerous oil and gas firms have already applied for exploration rights in the Karoo Basin
- Some of the companies that hold a Technical Cooperation Permit (TCP) are Shell, Falcon Oil and Gas-Chevron, Sasol-Chesapeake-Statoil, Sunset Energy and Anglo Coal
- The EIA reports the country has a corporation tax of 28% and royalty of 7%, terms that are favourable for the oil and gas industry
- In August 2013 it was announced that companies should also apply for a water usage license (Bloomberg)
- A study by Econometrix revealed shale gas can be a great opportunity for South Africa as just developing a 10th of shale gas could develop the economy by $19.56 a year and create about 700,000 jobs
Will South Africa lower its natural gas imports from Mozambique and Namibia? Will it develop a relevant domestic shale gas industry? Let me know your thoughts below.
Alternatively, to know more about shale gas developments in Africa, attend our congress Shale Gas World Africa.