South Africa’s Petroleum Ministry Partners with African Energy Week (AEW) 2024 to Drive Investment in Frontier Exploration

South Africa represents one of the world’s final frontiers for offshore oil and gas exploration, with indicated resources measuring as much as nine billion barrels. The country’s offshore gas resources are estimated at 60 trillion cubic feet (tcf) while onshore shale could be as much as 390 tcf. While exploration has been slow, recent developments in M&A activity and project advancement promise to reverse this trend, creating new pathways for energy security on the back of oil and gas. 

To attract further investment in frontier exploration, South Africa’s Ministry of Mineral and Petroleum Resources has partnered with the African Energy Week (AEW): Invest in African Energy conference for its 2024 edition. The partnership underscores the Ministry’s commitment to unlocking the full potential of the country’s oil and gas resources and will support new deals across the upstream industry.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

South Africa offers strategic opportunities for frontier oil and gas players given its shared acreage with neighboring Namibia, where a series of sizeable discoveries were made between 2022 and 2024. To capitalize on indicated shared resources, a number of global energy majors and independent E&P companies have acquired stakes in the South African Orange Basin in recent months. TotalEnergies and QatarEnergy acquired participating interests in Block 3B/4B, with TotalEnergies assuming a 33% stake and QatarEnergy a 24% share. TotalEnergies made two discoveries – Venus-1 in 2022 and Mangetti-1X in 2024 – in Namibia.

Similarly, independent energy company Eco Atlantic signed a farm-in deal with energy company Tosaco Energy for a 75% working interest in Block 1 in the Orange Basin. Block 1 already possesses extensive 2D and 3D seismic data, with the company planning to interpret and analyze existing data-sets within the next three years. The block is considered highly prospective given its proximity to Namibia’s Kudu field. These acquisitions stand to transform the South African energy market as they represent a crucial step towards unlocking South African offshore oil and gas.  

Meanwhile, South Africa’s hydrocarbon potential transcends into interior basins, with the country’s shale formations in the Karoo Basin offering lucrative opportunities for power generation and LPG. While seismic surveys are still required to determine the full extent of the area’s potential, indicated resources highlight trillion-cubic-feet opportunities for companies. Various oil and gas players are already making strides towards developing this potential. Independent E&P company Panoro Energy applied for an exploration right for helium and natural gas in the Karoo Basin in June 2024. The application involves a three-year work program and will result in a data-set that supports future exploration activities.

Additionally, gas explorer Kinetiko Energy recently announced that it raised $2.2 million to fund a five-well gas flow testing program in the Mpumalanga province. Set to start in Q3, 2024, the program aims to identify high-flow rate gas zones in exploration rights 271 and 270. These results will enable the company to apply for increases in resource and reserves certifications.

“Despite being Africa’s most industrialized nation, South Africa continues to grapple with an energy crisis – a crisis which can be alleviated through the development and monetization of oil and gas. The country should not have to rely on imports to sustain its economy but should be able to develop and utilize its own resources to drive sustainable growth. Close proximity to sizeable discoveries in Namibia, an expansive coastline with undeveloped blocks and growing consumer demand make the country a highly strategic market and investors should seize this opportunity,” stated NJ Ayuk, Executive Chairman of the African Energy Chamber.

In a recent cabinet announcement, South Africa’s President Cyril Ramaphosa renamed the Ministry of Mineral Resources and Energy to the Ministry of Mineral and Petroleum Resources. The new ministry will focus on maximizing the extraction and monetization of mineral and hydrocarbon resources, thereby streamlining the country’s hydrocarbon agenda. Through the partnership with AEW: Invest in African Energy, the ministry will engage with global investors, project developers and E&P firms on opportunities available in the South African oil and gas industry. AEW: Invest in African Energy aligns closely with the country’s commitment to alleviating its energy crisis through oil and gas, and will promote block opportunities, partnerships and future developments.

Distributed by APO Group on behalf of African Energy Chamber.