South Africa lifts fracturing moratorium; no permits imminent

The South African government lifted a moratorium on shale gas exploration in Karoo basin although the Petroleum Agency of South Africa indicated that regulatory details continue to be finalized, so it’s too soon to say when exploration permits might be granted.

Royal Dutch Shell PLC, Falcon Oil & Gas Ltd., and Bundu Oil & Gas Pty Ltd. have submitted applications for exploration permits.

Last year, South Africa’s minerals department imposed a temporary moratorium on hydraulic fracturing while it studied the possible effects on groundwater (OGJ Online, Apr. 22, 2011). The moratorium was lifted on Sept. 7.

The US Energy Information Administration estimates 485 tcf of technically recoverable shale gas resources in southern South Africa's Karoo basin, which contains thick, organic rich shales such as the Permian Whitehall formation.

Falcon in 2009 received a Technical Cooperation Permit covering 7.5 million acres, and last year, Falcon applied for an exploration right covering the same area. Falcon is based in Dublin, Ireland, and has an office in Badapest, Hungary. It has interests in Australia, Hungary, and South Africa.

Shell has submitted three separate exploration license applications, each covering 30,000 sq km, and those applications are in south and central South Africa. Those applications include land in Western Cape, Eastern Cape, and Northern Cape provinces.

Industry is interested in evaluating the gas content of fractured shales and sandstones of Permian age in the Karoo basin 120 miles northeast of Cape Town.

Nine wells drilled in the area in the late 1960s and early 1970s encountered gas shows. One well, drilled in 1968, flowed at the rate of 1.84 MMcfd of gas from fractures without stimulation, according to Soekor Inc. geological well completion report.

One group opposed to fracturing said it was disappointed by the decision to lift the moratorium.

“If any exploration licenses are issued in future, we will appeal and naturally resort to litigation should our appeals fail," Jonathan Deal, spokesman for Treasure the Karoo Action Group, told Reuters.

Contact Paula Dittrick at paulad@ogjonline.com.

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