GETTING THE DEAL THROUGH – OIL REGULATION 2014
Describe, in general terms, the key commercial aspects of the oil sector in your country.
The entity, Geological Survey of South Africa, initiated the original organised search for hydrocarbons in the Republic during the 1940s. The first oil company was established in 1884 for the purpose of, inter alia, the import of refined products. South Africa’s state oil company was established in 1965 and was named Soekor (Pty) Ltd (Soekor). The company explored areas of the Karoo, Algoa and Zululand Basins.
In 1967 the Mining Rights Act was introduced and offshore concessions were granted to international companies. These companies included Total, Gulf Oil, Esso, Shell, ARCO, CFP and Superior. The first offshore well was drilled in 1969, and oil and gas were discovered by the Superior Group in the Pletmos Basin.
In 1970, Soekor (together with Rand Mines) extended its exploration activities to the offshore regions of the Republic. However, despite further encouraging discoveries, international companies gradually withdrew pursuant to political sanctions imposed on the country. From the mid-1970s to the late-1980s, Soekor was the only explorer operating in the offshore areas of South Africa. After the elections in 1994, international investors were again invited by means of licensing rounds to participate in the exploration of the seabed in the Republic’s exclusive economic zone. In 2001, a new state oil company, Petroleum, Oil and Gas Corporation of South Africa SOC Ltd (PetroSA), was established by the merger of Soekor and Mossgas.
Between 1981 and 1991, 181 exploration wells were drilled, with the Bredasdorp Basin being the focus of most of the seismic and drilling activities. Since 1980, over 300 appraisal, exploration and production wells have been drilled offshore, and 233,000km2 of 2D seismic data and 10,200km² of 3D seismic data have been acquired. The exploration activities led to the discovery of oil and gas fields and to the commercial production of oil and gas in the Bredasdorp Basin.
In the Pletmos Basin, two gas fields and a further six gas discoveries are undeveloped. One oil and several gas discoveries have been made off the West Coast in the Orange Basin. One of these discoveries, the Ibhubesi Gas Field, is currently being appraised and developed by the joint venture in which Sunbird Energy Limited and PetroSA are participants.
South Africa has four conventional refineries and three synfuel plants with an overall refining capacity of 700,000 bbl/d. South Africa is estimated to have approximately 390 trillion cubic feet of technically recoverable shale gas resources making it the country with the 8th largest shale gas reserves in the world.Read further