S. Africa counts on energy for revival

South Africa is banking on the energy sector to spur economic growth and help secure a more stable recovery from the coronavirus pandemic.

Minister for Mineral Resources and Energy Gwede Mantashe said the provisions in the Petroleum Resources Development Bill, put out for public comment in Dec 24, last year, will play a crucial role in the recovery and help reduce the country's dependence on hydrocarbon imports.

"We have had consultations with a broad range of stakeholders. Our intention is to have the bill finalized, and so attract investment and ensure synergy between oil and gas activities and our nation's environment and water resources," he said.

The bill has encouraged Total South Africa, a French multinational integrated oil and gas company, in its plans for the country. The company is set to drill off Mossel Bay, a harbor town in Western Cape Province, in a program costing $91 million.

"We are thrilled with the confidence shown by Total in our government and our country and hope for an even bigger find of oil this time around," Mantashe said.

Pre-feasibility study

Saudi Aramco, a Saudi Arabian petroleum and natural gas giant, has been engaged to conduct a pre-feasibility study into a crude oil refinery in Richards Bay, a city in KwaZulu-Natal Province.

Mantashe, who was speaking at a virtual meeting for Africa Oil Week on Oct 8, said officials are exploring ways to reduce high costs and improve the reliability of supply through the Integrated Resource Plan, which was approved in 2019.

He said the Ministry of Mineral Resources and Energy has issued two orders to enable expansion of the electricity supply by 13,000 megawatts, with the results to come in over the short to medium term.

The country is also repositioning itself as a serious player in the global gas market. Toward that end, South Africa is advancing its gas-to-power projects centered on the Coega Special Economic Zone, which will have the country's first liquefied natural gas import terminal.

"This lays a foundation for gas-to-power plants and converting existing power plants from diesel to gas," Mantashe said.

The Coega zone in Eastern Cape Province, will exploit its location to service African and global markets. Mantashe said a technical working group will produce a commercial business plan for the development of liquefied natural gas import-export facilities in ports across country.