New natural gas discovery by Total in South Africa in line with its production growth plan
IN LINE WITH ITS GOAL to increase production by 9 percent in 2019, Total has said it made a “significant” gascondensate discovery offshore SouthAfrica, opening up a new natural gas andoil play off the southern part of Africaexpected to spark a new round of drillingin the region.
Total is expecting ramped-up output from Egina in Nigeria,Kaombo North in Angola, and the Ichthys field off northwest Australia to boost its production.
However, Brulpaddais one of Total’s biggest exploration targets this year, and has been on the upstream sector’s global watch list for years as a key wildcat with frontier opening potential. Although not a crude find, its gas resources could feed South Africa’s flagship gasto-liquids facility at nearby
Mossel Bay, which lies about 180 km northwest of the find.
Though the French company gave no officialestimate on the potential resources at the find, it is targeting resources of around
1 billion barrel of oil equivalent (boe)with the well, Total said in statementthat “with this discovery, Total hasopened a new worldsource class gas and oil playand is well positioned to test severalfollow-on prospects on the same block.”
Energy consultancy, Wood Mackenzie said concerning the discovery that “even though the well isn’t an oildiscovery, if Brulpadda proves to beanywhere near as big as the estimates of up to 1 billion barrels of oil equivalentresources, it will
still be a gamechangerfor South Africa.”
Total also said that it plans further exploratory drilling to establish the full extent ofthe discovery and to establish whethercommercial deposits of oil exist alongsidethe gas.
Total operates the block with a 45 percentworking interest, alongside QatarPetrothat (25 percent), CNR international(20 percent) and Main Street, a SouthAfrican consortium (10 percent). Canadianminnow Africa Energy holds a 4.9 percenteffective interest in the block via its 49percent stake in Main Street.
The Frenchmajor also operates the adjacent, evenlarger Outeniqua South block which has yetto be drilled and extends out to waterdepths of more than 4,000 meters.
Energy-hungry South Africa has long hopedfor bigger offshore developments, butlittle exploration has been carried out todate.
The potential for new homegrownsource of oil and gas would be major boon for the country.
South Africa imports about 70 percent ofits oil needs from the Middle East andAfrica.
If a commercial development issuccessful, it could have a seismic impact on the economy.
Power generation would bestabilized, and the bleeding of thebalance of payments account to pay forimported oil would stop.
“The find is guaranteed to spark a newwave of interest in acquiring acreage inthe country’s deep offshore waters, andshould bring major benefits for SouthAfrica’s ailing economy,” Ben Payton,Verisk Maplecroft’s African head, said ina note. “...the process of revising thecountry’s hydrocarbon legislation will nowbe catapulted onto the politicalfrontline.”
If the gas part of the find issubstantial, Brulpadda could also prove acatalyst to restart South Africa’s gasto-power program and help replenish gassupply to the Mossel Bay gas-to-liquidsplant, Wood Mac noted.
The production from Brulpadda could beused as a feedstock for gas-to-powerplants, which would reduce or eliminatethe need for South Africa to import LNG orconstruct additional pipelines fromMozambique.
Also, oil and gas production from the oil major for 2018 climbed by 8.1 percent from a year earlier to 2.775 million barrels per day of oil equivalent, a record high.