With the fifth edition of South Sudan Oil & Power 2022 kicking off on Tuesday, Hon. Gwede Mantashe, South Africa’s Minister of Mineral Resources and Energy, provided insight into the role regional cooperation and intra-African trade plays in Africa, as well as new opportunities for South Africa-South Sudan collaboration in an exclusive interview with Energy Capital & Power.
This year’s edition of South Sudan Oil & Power represents the first time a South African delegation has participated. What are you hoping to come out of the event and can we expect any new deals between the two countries?
We are expecting an acceleration of the execution of the standing memorandum of understanding.
The signing of the Memorandum of Understanding took place in 2018. From there we can build new opportunities, new developments and add value to the economy.
Please provide some insight into your Ministry’s 2022-2023 agenda. What is your short-term outlook?
In 2022-2023, we wish to start developing the oil block we have agreed to work on. We are hoping to have an agreement on the geological mapping. If we can do those two things, then we will have kickstarted a program that, in the long term, will be a big project.
South Africa has long been a steadfast partner of South Sudan. What areas do you see having the highest potential for collaboration between the two nations?
The biggest potential in South Sudan is in energy and mining. As a young economy, commodity economics is a kickstarter of the economy. Then we can develop value addition on top of those. Agriculture is always forgotten but it is also an area we can look into. In my opinion, Africa can feed itself and feed Europe and the Middle East.
What is your medium to long-term outlook for South Africa’s energy sector?
We have got a plan in South Africa called the integrated resource plan (IRP) which was established in 2019 and which we are revisiting. There is pressure to transition to clean energy. However, our position is that we cannot be treated the same as Europe where we are told to switch off coal for example. We must phase in and phase out. We must be able to have a combination of technologies, moving and transitioning from high carbon emissions to low carbon emissions. In my view, coal will be with us for a long time, oil and gas are going to be critical in the transition. Nuclear is one of the best options we have. Therefore, a combination of these technologies will be critical for our economy.
This month, the Virginia Gas Project – South Africa’s first commercial liquefied natural gas (LNG) facility came online. What is the significance of this project and are there any other LNG developments in the pipeline?
South Africa has been working on LNG, it is one of our objectives over the last two or three years. The reason we are placing emphasis on LNG is that we import gas. We are exploring for new gas deposits in South Africa but we cannot wait on these discoveries before we push the industry. By importing LNG, this will be a change agent for unlocking energy. We are hoping that with LNG we will be able to develop liquefied petroleum gas as well, that means bottled gas can grow as a sector.
What role will regional collaboration play in your LNG plans?
The import of gas will be from Mozambique and from there we will look into the region. Therefore, from there, our integrated development as a region will be important. What we are emphasizing today, and the reason we are here today, is that one of the aspects we are emphasizing is increasing intra-Africa trade, rather than looking far to develop our economies. Let’s trade among ourselves and develop ourselves and create an integrated economy. The African Continental Free Trade Agreement is very important for the continent.
Namibia has made two large-scale discoveries this year. Do you have any plans to work with Namibia?
Namibia is our neighbor. We will work with Namibia and we are hoping that their oil will stretch into our own oceans. We are hoping to make a new discovery together and bring new oil and gas production into the continent.
What message do you have for investors looking at both South Africa’s and South Sudan’s energy sectors?
Investors much appreciate the fact that we have the deposits, they have the money, and we must work together to create wealth. It is the creation of wealth out of the products we have that is important for investors. Investors will come where they are able to create wealth.