New oil fields in South Africa discovered
French oil and gas major Total said it had made a significant gas condensate discovery after drilling its Brulpadda prospects on Block 11B/12B in the Outeniqua Basin, offshore South Africa.
South Africa is the southernmost country in Africa. It is bounded to the south by 2,798 kilometres (1,739 mi) of coastline of Southern Africa stretching along the South Atlantic and Indian Oceans. The World Bank classifies South Africa as an upper-middle-income economy, and a newly industrialised country. Its economy is the second-largest in Africa, and the 34th-largest in the world.
Total S.A is a French multinational integrated oil and gas company founded in 1924 and one of the seven "Supermajor" oil companies in the world. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading. Total is also a large-scale chemicals manufacturer. The company is a component of the Euro Stoxx 50 stock market index.
South Africa’s first deep-water discovery, reported by French oil major Total SA, may prompt a rush of activity offshore by competitors as the country works to cut its reliance on imported fuels. The Brulpadda find, estimated at about 1 billion barrels by Total Chief Executive Officer Patrick Pouyanne, could be enough to supply South Africa’s refineries for almost four years. That’s a boon for a country that has always been short of oil and is running out of its scant domestic supply of gas.
The field of primarily gas-condensate - a light liquid hydrocarbon - was discovered about 175 kilometers (109 miles) off the country’s southern coast in the Outeniqua Basin. The area, where Exxon Mobil Corp. and Eni SpA also hold stakes, may now draw further interest, especially since South Africa is due to introduce new legislation later this year aimed at spurring exploration.
The find “is potentially a major boost for the economy,” Minerals Minister Gwede Mantashe said. “We welcome it as we continue to seek investment.” President Cyril Ramaphosa is seeking to lure $100 billion of investments by 2023 to revive a struggling economy. The country’s energy supply is largely based on coal, while state power utility Eskom Holdings SOC Ltd. also runs turbines on costly diesel fuel. A failed exploration campaign in shallow waters has meant a gas-to-liquids refinery at Mossel Bay runs well below capacity.
Total’s discovery is a “catalytic find” for the country, said Niall Kramer, chief executive officer of the South African Oil & Gas Alliance, an industry lobby group. “There’s nothing that has been on this kind of scale.” Following the success of Brulpadda and confirmation of its potential, Total and its partners plan to acquire 3D seismic this year, followed by up to four exploration wells on the licence, the company said.
Total has a 45 percent working interest and is the operator of the Block 11B/12B which covers an area of 19,000 square kilometres. Other partners include Qatar Petroleum with a 25 percent stake, CNR International holds 20 percent and Main Street, a South African consortium 10 percent. The resource could be about three times the size of all South Africa’s gas finds to date. But Total cautions that the operating environment offshore is tough.
Africa as a whole has seen an increase in drilling, with oil and gas rigs around the continent topping 100 in recent months, according to Baker Hughes data. The count was as low as 77 in 2017.
Our assessment is that the discovery of such a large oil deposit in South African borders is a boon for President Ramaphosa who has been struggling to revive the stagnant economy. We believe that Total’s new exploration projects will earn South Africa crucial foreign exchange, produce high skill jobs and will provide cutting edge technical expertise.