New gas find could give SA fiscus a R1 trillion lift

SOUTH Africa has suddenly become a world-class hydrocarbon exploration destination and will overnight make a trillion rand for the fiscus following the discovery of significant gas in the Outeniqua Basin, off the coast of South Africa.

Stephen Larkin, expert in Southern Africa oil and gas exploration and chief executive of Africa New Energies said a lot of dollars of investment would flow into the country and, more importantly, the discovery would save jobs at Mossgas, which was on the brink of closure in 2022, but will now be rejuvenated.

“Overnight, South Africa will make a trillion rand it did not have before. Granted, this will be spread over 20 years, but this will reduce the government’s fiscal deficit by about 30 percent,” Larkin said. French oil and gas company Total confirmed that it had made a gas condensate discovery on the Brulpadda prospects after drilling in deep sea waters, 175km off the southern coast of South Africa.

Located on Block 11B/12B in the Outeniqua Basin, Total said the Brulpadda well encountered 57 metres of net gas condensate in lower cretaceous reservoirs. Following this discovery and confirmation of its potential, the company said it would follow up with 3D seismic tests before drilling four exploration wells.

In his State Of The Nation adress last night, President Cyril Ramaphosa said the discovery was a game changer.

“We are extremely encouraged by the report this morning about the Brulpadda block in the Outeniqua Basin, which some have described as a catalytic find,” he said.

He said the government will continue to develop legislation for the sector, so that it is properly regulated for the interests of all concerned.

Larkin said the industry was highly encouraged by the government’s pragmatic approach to exploration effective regulatory framework