Shell gets nod to drill wells in SA's Orange basin

© suwatpo – 123RF.com

This gives Shell permission to drill up to two offshore exploration wells in the northern portion of the licence area, which covers about 37,290km². Successful exploration of gas will be a major step towards the diversification of South Africa's energy mix.

Offshore oil and gas exploration is also part of Operation Phakisa, a government initiative to unlock the economic potential of South Africa's oceans.

In 2012 the Department of Mineral Resources granted Shell the exploration right in the Orange Basin.

In February 2013, Shell completed a 3D seismic survey in an 8,000km² area in the licence area. Based on seismic data analysis, Shell has proposed to drill one or possibly two wells in the area. The drilling of the second well would depend on the success of the first, the report said.

A final environmental impact assessment report on the proposed drilling says if the exploration is successful, it presents an opportunity to develop a South African oil and gas industry resulting in long-term benefits consisting of access to new energy sources, improved security of supply and reduced dependence on imported hydrocarbons.

The report says the Orange Basin Deep Water Licence Area is part of Shell's strategy to build an integrated business in South Africa. In this country Shell is strongly associated with retail and commercial fuels, lubricants and oil as well as chemicals.

But in recent years the company has shown interest in South Africa's oil and gas resources, hence its application for exploration rights in the Orange basin. The company has also applied for exploration in the Karoo basin to find out if it contains a commercial quantity of shale gas.

Source: Fin24