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Africa Oil & Gas: Total’s South Africa Oil Discovery Could Be A Game-Changer

One of the promising hotspots for oil and gas exploration drilling this year—South Africa’s offshore—has just yielded a massive natural gas and condensate find that could open a new exploration province for oil majors and change the energy fortunes of South Africa.

France’s major Total said this week that it had made a significant discovery on the Brulpadda prospects off the southern coast of South Africa.

“With this discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” said Kevin McLachlan, Senior Vice President Exploration at Total.

According to Total’s chief executive Patrick Pouyanne, the discovery could hold 1 billion barrels of oil equivalent of gas and condensate resources.

The operator of the license, Total, and its partners Qatar Petroleum, CNR International, and South African consortium Main Street, now plan to acquire 3D seismic data this year, followed by up to four exploration wells on the license.

“It is exciting for our country that this discovery has been made. It is potentially a major boost for the economy, and we welcome it as we continue to seek investment to grow our economy,” South Africa’s Mineral Resources Minister Gwede Mantashe said, commenting on the major gas discovery.

The African Energy Chamber (AEC) also hailed the first major deepwater discovery off South Africa, saying, “This is a great first step for the country which still relies on imports of oil and gas despite the great reserves believed to be in its soil and waters.”

According to AEC, the discovery could change the course of South Africa’s economy and help to reduce the country’s dependence on oil and natural gas imports.

“The oil industry hopes this will be a catalyst and encouragement for all policy makers to work on an enabling business environment for exploration and drilling activities in South Africa,” NJ Ayuk, Executive Chairman at the Chamber, said.

South Africa is currently working on new legislation that would separate the conditions for exploring and exploiting oil and gas resources from those for traditional minerals.

Commenting on Total’s discovery, Andrew Latham, vice president, global exploration at natural resources consultancy Wood Mackenzie, said:

“Even though the well isn’t an oil discovery, if Brulpadda proves to be anywhere near as big as the estimates of up to 1 billion barrels of oil equivalent resources, it will still be a game-changer for South Africa.”

Although the difficult deepwater environment could pose a challenge, the difficulties may be similar to those present in the West of Shetland in the UK North Sea—a region that Total knows well and in which it has experience, Latham noted.

In terms of the discovery’s potential to meet South Africa’s gas demand, WoodMac’s Akif Chaudhry, principal analyst, commodity analytics, said:

“While a strong case can be made for the development of the gas economy, long-term growth requires a clear plan from government.”
Related: Oil Rig Count Rises As Oil Prices Stabilize

While South Africa is currently drafting new legislation on oil and gas resource development, the offshore regions around the whole African continent has recently seen growing interest from oil and gas majors willing to explore what they believe is the next exploration hotspot in the world. BP and Shell are expanding their African presence, while ExxonMobil is focusing on western and southern Africa, amassing stakes in prospects in Ghana, Mauritania, Namibia, and South Africa, hoping to strike a discovery containing no less than a billion barrels of crude, also known as an elephant.

South Africa was one of the hotspots of promising exploration drilling that WoodMac had identified for this year, alongside Guyana, Brazil, Mexico, the U.S. Gulf of Mexico, Cyprus, and the Barents Sea in Norway.

Total’s major deepwater discovery offshore South Africa is now opening a potential new wave of majors drilling in the area, hoping to find the next billion-barrel discovery.

By Tsvetana Paraskova for Oilprice.com

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