Representing a frontier oil and gas market, South Africa seeks to accelerate exploration in both on- and offshore markets to unlock the full potential of its oil and gas resources. Upstream activity in recent years has shown the potential for commercial deposits, and recent developments across the industry point to a promising future.
Africa Energy Corp. Becomes Operator of Block 11B/12B
Through its subsidiary Main Street, oil and gas exploration company Africa Energy Corp. became the operator of Block 11b/12B, offshore South Africa. The company is currently acquiring key technical data, including drilling, reservoir and development engineering information, from the previous operator, while the Environmental and Social Impact Report is being finalized. The report will be submitted in Q1, 2025.
Kinetiko Energy Spuds Test Well
Gas exploration company Kinetiko Energy spud the second well in a five-well production test program in October 2024 in Mpumalanga Province, onshore South Africa. The nine-month program aims to unlock the company’s contingent resource base of 6 trillion cubic feet of gas in the province. Following drilling, the company will flow-test each of the wells.
South Africa Establishes New Petroleum Company
In September 2024, South Africa’s President Cyril Ramaphosa announced the establishment of the country’s new petroleum corporation: the South African National Petroleum Company (SANPC). Formed through the merger of Central Energy Fund subsidiaries iGas, PetroSA and the Strategic Fuel Fund, the SANPC is tasked with overseeing the strategic planning, coordination and governance of the country’s petroleum resources.
Shortly thereafter, the SANPC kicked off its global investor roadshow at African Energy Week 2024 – held in November. During the event, the SANPC invited investors and governments to engage with South Africa’s oil and gas prospects, while showcasing strategic plans for the new entity. The SANPC is expected to host a series of roadshows spanning Africa, Europe and the Middle East, organized by Energy Capital & Power.
TNPA Launches RFP for LNG Terminal
South Africa’s state-owned Transnet National Ports Authority launched a request for proposals for an environmental impact assessment for the development of an LNG terminal at the Port of Ngqura. The assessment will review the environmental compliance of the project, including a seismic survey, marine ecology and climate change impact assessment.
Sasol, Eskom Sign LNG Supply Agreement
South African integrated energy and chemicals company Sasol signed an agreement with the state-owned power utility Eskom to explore options for aggregating gas supplies and accelerating LNG uptake across the country. Signed in September 2024, the deal will see the companies collaborate on assessing the LNG volumes needed to establish a sustainable import market and build the requisite infrastructure.
South Africa Establishes Ministry of Mineral and Petroleum Resources
Following the merger of the electricity and energy portfolios of the government, South Africa established a separate Ministry of Mineral and Petroleum Resources. Led by Gwede Mantashe – who previously served Ministry of Mineral Resources and Energy – the new ministry will focus on maximizing the extraction and monetization of mineral and hydrocarbon resources in the country.
South Africa Publishes Draft Petroleum Bill
South Africa’s Department of Mineral and Petroleum Resources published the country’s draft Petroleum Products Bill (PBB) for public comment in October 2024. Aimed at streamlining licensing and appeals processes, improving compliance and clarifying administrative processes across the petroleum sector, the PBB seeks to strengthen the Petroleum Products Act. With the policy improvement, the PBB seeks to ensure security of supply while promoting the orderly development of petroleum products in the country.
Orange Basin Witnesses Slew of M&A Deals
Eager to replicate upstream success seen on the Namibian side of the shared Orange Basin, a slate of energy companies have either expanded or acquired interests offshore South Africa. Through its subsidiary Azinam South Africa, oil and gas exploration company Eco Atlantic acquired a 75% working interest in Block 1 in in June 2024. The company serves as the operator and will carry out a work program for the first three years of the contract.
Additionally, energy majors TotalEnergies and QatarEnergy acquired participating interests in Block 3B/4B in the Orange Basin in March 2024. TotalEnergies assumes operatorship with a 33% stake, QatarEnergy takes on a 24% interest while partners Africa Oil South Africa, Azinam and Ricocure hold the remaining stakes. TotalEnergies has since requested environmental authorization to drill up to seven exploration wells in the deepwater Orange Basin, covering an area of 15,000km².
