South Africa Oil Discovery Could Be A Game-Changer
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.”
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 interestfrom 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.