Total makes big offshore discovery
Total says it has opened up a new “world-class” oil and gas province off the coast of Mossel Bay after making a significant gas-condensate discovery.
A significant gas-condensate find off the coast of SA will provide a significant boost for the economy of R1-trillion over the next 20 years.
French oil and gas company Total announced on Thursday it has opened up a new “worldclass” oil and gas province off the coast of Mossel Bay at its Brulpadda prospects on Block 11B/12B in the Outeniqua Basin.
“This could well be a gamechanger for our country and will have significant consequences for our country’s energy security and the development of this industry,” President Cyril Ramaphosa said in his state of the nation address on Thursday.
Success in the nation’s first deep-water well is a potential boon for SA, which imports most of its oil.
“We are very pleased to announce the Brulpadda discovery, which was drilled in a challenging deep-water environment,” said Kevin McLachlan, senior vice-president of exploration at Total.
“Total has opened a new world-class gas and oil play and is well-positioned to test several follow-on prospects on the same block.”
Stephen Larkin, an expert in Southern African oil and gas exploration and CEO of Africa New Energies, says the discovery, which could hold 1-billion barrels of gas condensate, will bring in at least R1-trillion over the next 20 years.
SOUTHERN AFRICA HAS JUST BECOME THE HOTTEST DESTINATION FOR HYDROCARBON EXPLORATION IN THE WORLD
Larkin’s calculation is based on the estimated 1-billion barrels of gas condensate and the current price of gas condensate, a prized hydrocarbon that trades at a premium of between $5 and $10 to the oil price.
The find is significant because it could represent a sea change in investor sentiment.
“Southern Africa has just become the hottest destination for hydrocarbon exploration in the world,” Larkin said.
“It’s a catalytic find,” said Niall Kramer, CEO of industry lobby group SA Oil & Gas Alliance. He said the country has only drilled in shallow waters before. “There’s nothing that has been on this kind of scale.”
Kramer said the foreign exchange, tax, energy and security implications for SA are significant. Larkin said if the government plays its cards right, the find could reduce the budget deficit by 30%.
“It’s probably quite big,” Total CEO Patrick Pouyanné said on Thursday. “Having said that, the region is quite difficult to operate: huge waves and the weather isn’t very easy.”
Total was drilling about 175km offshore in the Outeniqua Basin to a final depth of 3,633m. The discovery, which also includes some light oil, could prompt a rush of activity offshore by other firms, especially as new oil and gas legislation is due out later in 2019.
Africa has seen an increase in drilling, with oil and gas rigs around the continent topping 100 in recent months, according to Baker Hughes data. The count was as low as 77 in 2017.
Total has a 45% working interest in Block 11B/12B, Qatar Petroleum holds 25%, CNR International 20% and SA consortium Main Street 10%.
Kramer said the news is also potentially big for the nascent services industry. “We now need to ensure we are developing our readiness in terms of skills and capacity for South Africans to participate fully.”