Oil and gas (exploration and support)
Support (oil and gas)
South Africa is a preferred destination for repair, maintenance and upgrade of drilling ships, semi-submersibles and jack-up rigs for operations in African waters. The country offers a compelling mix of world-class engineering, deep supply chains, and proximity to key drilling sites.
Around 80 oil rigs are estimated to be in the range of Western Cape, offering significant potential for repairs in our ports, as well as land-based operational support. For any West African site from Nigeria southwards, over 20 days of round-trip can be saved compared with the nearest alternative sites in Europe. The rapid turnaround times enabled by specific oil and gas skills and experience, together with transparent tariff rates, combine to give a highly competitive overall cost of work. Vessels come from as far away as South America to take advantage of the country’s engineering skills, capacity and fast turn-around times.
Saldanha Bay, the deepest and largest natural harbour in the Southern hemisphere, has been designated as a dedicated oil and gas servicing hub, and the Transnet National Ports Authority has earmarked a strategic fund of around US$600 million for Saldanha to grow the continent’s energy industry. A new, specialised oil and gas maintenance and repair centre is being implemented at Saldanha Bay, to work alongside existing capabilities at Cape Town and Saldanha. It will include a new deep-water berth for rigs and drill ships, and a new construction, repair and maintenance berth.
The finding of plentiful oil reserves off the coast of South Africa has so far proved elusive, but it is believed that resources of around nine billion barrels of oil may lie under the waters. This is equivalent to 40 years of South African oil consumption. There may well be eleven billion barrels oil equivalent of natural gas, which is equal to 375 years of South African gas consumption. In the meantime, imported gas from and shale gas may supply some of the country’s energy needs.
The South African Government wants to see 30 wells drilled in 10 years, but is aware that it has to create the enabling environment to give industry the comfort to invest in the capital-intensive business of exploration. Government recognises it must provide clarity and stability in the legislative framework governing offshore oil and gas, ensuring a win-win outcome for government, industry, and society. Resolution of uncertainties around controversial amendments to the Mineral and Petroleum Resources Development Act will give investors an opportunity to consider taking part in offshore exploration.
The target is to drill 30 exploration wells in 10 years. Over the next 20 years, this work could lead to the production of three hundred thousand (370 000) barrels of oil and gas per day. This is approximately 80% of oil and gas imports. Such a development would create one hundred and thirty thousand jobs and contribute US $2.2 billion to GDP.
Large offshore and onshore gas reserves discoveries in Mozambique and Tanzania present development opportunities for among others energy generation in South Africa. A phased gas pipeline network emerged as an infrastructure requirement from Operation Phakisa, originally to exploit mooted offshore gas reserves, but now also for imported liquefied natural gas and possible shale gas in the Karoo (though this is environmentally unpopular).