African Reserves

Optimizing the gas market is key to addressing the looming energy crisis in South Africa

As South Africa‘s power crisis continues to escalate, with utility Eskom stepping up implementation of load shedding; maximizing the exploitation of the country’s gas reserves is key to ensuring energy security, accessibility and reliability.

In addition to stabilizing energy supply, optimizing the gas sector offers Africa‘s second-largest economy the opportunity to attract the massive investments needed to drive economic expansion through job creation, GDP growth and growth. ‘industrialization.

However, various challenges, including unwarranted disputes related to the energy transition against hydrocarbon development, weak technical solutions, underdeveloped gas infrastructure, delays in the deployment of gas projects, policy gaps and inadequate investments in the gas sector. exploration and production, continue to prevent the South African gas market from reaching its full potential. potential, plunging the country’s energy sector into turmoil.

As litigation continues to scare off investment, with the country halting massive oil and gas investments of up to R1 billion in less than two months – according to energy regulator Petroleum Agency SA – a major energy crisis looms on the horizon for South Africa. On top of that, major player ExxonMobil is also exiting the market, exacerbating the need to dramatically accelerate upstream investment and production activities.

“Our view is that natural gas will be part of the transition, yet we are told that all fossil fuels are bad. Africa must position its oil and gas at the forefront of global energy. When we commit to zero emissions, we do so with the reality that energy can drive economic growth and industrialization. The way forward is for Africa to make the most of its existing and applicable resources. The African continent must develop new technologies and strategies to ensure that it continues to develop its resources,” said South African Minerals and Energy Minister Gwede Mantashe at the opening ceremony of Africa Energy Week (AEW) last year.

The African Energy Chamber (AEC), as the voice of Africa’s energy sector, strongly believes that South Africa’s solution to its current and impending energy challenges is gas.

The Chamber calls on the South African government and energy market players to accelerate the development of recent discoveries, including TotalEnergies’ Brulpadda and Luiperd projects, to generate additional energy capacity for security while advancing exploration activities and infrastructure development in the upstream, midstream and downstream sectors.

“South Africa’s vast gas resources provide an opportunity to stimulate the decline in electricity generation and it is vital and urgent for the country to relax regulations and create an enabling environment for the start-up of oil and gas projects. gas companies,” said NJ Ayuk, Executive Chairman of the AEC.

By relaxing regulations and replicating oil and gas environmental sustainability best practices such as those implemented in Mozambique and Namibia where massive gas projects such as Graff, Venus, Coral Floating Liquefied Natural Gas (LNG), Area 1 LNG Trains 1 & 2 and the Area 4 LNG Trains 1 & 2 are fast-tracked for energy security, South Africa has the opportunity to attract the investment needed to reduce its energy problems by harnessing domestic energy resources.

The planned investment of $3 billion by TotalEnergies to bring to market up to 2.1 trillion cubic feet (tcf) of gas from the Luiperd and 1.3 tcf of gas from the Brulpadda projects by 2027 is a step in the right direction.

“The best way for South Africa to get rid of load shedding in the long term is to optimize the development and exploitation of its 60 tcf of offshore gas reserves and about 200 tcf that are onshore from the Brulpadda discoveries. and Luiperd of TotalEnergies, while creating the right environment for companies, including the big Shell, to develop their exploration activities,” continues Ayuk, adding that “renewable energies, including solar and wind, remain expensive for ordinary people and will not provide the basic energy that South Africa needs to deal with its growing energy crisis. . We believe that a resilient energy mix in South Africa is one that includes more coal and gas.

In this regard, the ACS Africa Energy Week (AEW), Africa’s premier event for the oil and gas sector, to be held from 18-21 October 2022 in Cape Town, will welcome market players from energy, political and regional decision-makers and international energy companies and investors to discuss the role of gas in stabilizing South Africa’s energy production and supply.

AEW 2022 will host high-level panel discussions and meetings on the important role of indigenous gas in helping South Africa and Africa as a whole mitigate high energy prices and chronic shortages resulting from geopolitical tensions , and accelerating industrialization, manufacturing and accelerating job creation.

Distributed by APO Group for African Energy Week (AEW).

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About AEW 2022:
AEW 2022 is the AEC’s annual conference, expo and networking event. AEW 2022 brings together African energy players with international investors and partners to drive industry growth and development and promote Africa as an energy investment destination. Key organizations such as the African Petroleum Producers Organization, as well as African heavyweights including Equatorial Guinea and Nigeria, have partnered with AEW, furthering the role the event will play in the future. energy of Africa.

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