In the last five years, several E&P companies, primarily owned by South Africans, have left the upstream market, such that it is tempting to declare the end of the growth of South African E&Pindependents.
JSE listed SacOil, badly burned by its dealings in Nigeria with local partners Transcorp and NigDel, has turned into a downstream company and changed its name to Efora.
Thombo Petroleum, owned by Trevor Ridley, former Petroleum Advisor at BHP Billiton, disappeared into the folds of Canadian owned Africa Energy Corp.
But apart from Sasol Exploration and Production International, which is the most visible and best resourced South African bornE&P company, there are a number of companies to consider:
JSE and ASX listed Renergen describes itself as an integrated alternative and renewable energy business that invests in early-tage alternative energy projects.
But it started its project life six years ago by acquiring an onshore natural gas acreage from Molopo South Africa Exploration and Production. Renergen holds the first, and currently only, onshore petroleum production right in South Africa.
Several homegrown independent South African companies, including Tshipise Energy (Pty) and Sungu Sungu Petroleum, are exploring for natural gas, in coal beds, in the Karoo and offshore Orange Basin, but their distance to development is, at best, far off.
Renergen is the only one pumping natural gas from subsurface reservoirs into the local market. It has been supplying compressed natural gas to transportation companies since May 2016.
South African National Petroleum Company (formerly PetroSA), the only other natural gas producer in the country, is a state-owned enterprise.
Renergen is working on ramping up production from its acreage, which holds an estimated 142Billion standard cubic feet of proven and probable reserves, near Virginia, about 300km southwest of Johannesburg. It has moved intoliquefied natural gas (LNG) production, “primarily serving the growing domestic heavy duty truck market across Africa and emerging markets”, it says. Renergen has signed an offtake agreement with South African Breweries (SAB) for the supply of liquefied natural gas to power its delivery trucks. For this project, it initially rolled out compressed natural gas to a small fleet of SAB trucks in Gauteng, the country’s major commercial province.
A POTENTIAL STAR IN THE SOUTH AFRICAN E&PFIRMAMENT is Sunbird, a gas explorer and developer which owns a 76% interest in the Ibhubesi Gas Project, Block 2A, offshore of the west coast of South Africa and is the operator of the block. The company was originally owned by Australians, and was sold to South Africans in 2016. The Ibhubesi Gas Project is the country’s largest, undeveloped gas discovery, in the opinion of Sunbird and the local media. Theindependently certified gas reserves are 540 Bcf (2P) with “best estimate” prospectivity of close to 8 Tcf of gas, according to the company. The immediate focus of the project is provision of gas to the Ankerlig Power Station, an 11 year old, 1,338MW capacity thermal plant, designed to be fired by natural gas, but instead, utilizing expensive diesel fuel.Sunbird’s JV partner PetroSA, holds the remaining 24% in Ibhubesi.
Sunbird, for now, remains no more than a potential.
Five years after the Department of Environmental Affairs (DEA) issued an Environmental Authorisation (EA) for the project, the company is not anywhere close to concluding the gas sales negotiations with Eskom, the South African state power utility which owns the Ankerlig power plant. Nor is Sunbird seen to be progressing any deal to sell gas for industrial uses like Renergen is doing.