First Diamonds, then Gold, now it’s Oil from West Coast, Karoo.
The DA’s James Lorimer believes South Africa is on the cusp of hitting a natural resources jackpot transformative as the discovery of diamonds in 1867 and the Witwatersrand gold basin twenty years later. In this uplifting interview, the Shadow Minister of Minerals and Energy explains how the offshore Orange Basin, which extends from southern Namibia to beyond Cape Town, has 10x the oil and gas potential of Total’s vaunted gas discovery off the southern Cape. Lorimer adds that after a tortuous process, revised legislation before Parliament will, finally, be aligned with global norms and thus acceptable to multinational oil majors. He reckons that given the prospective nature of the geography and this year’s rich strikes in Namibia, once the legislation is passed, the oil majors are likely to invest heavily in exploration. With each well costing around R500m and the nation pocketing roughly 60% of all revenue generated from oil and gas produced, Lorimer advocates making it possible to adopt an approach of “drill, baby, drill” by Shell, Total and their peers – not just off SA’s West Coast but also to exploit the Karoo’s shale gas potential. Lorimer shared the excellent news with Alec Hogg of BizNews.
James Lorimer on the oil bonanza in the west coast of SA
Very much so and in greater quantities than they have thus far found in the Mossel Bay find. Yeah. So at this stage it’s entirely speculative as to what’s down there. But given what they’ve found so far, there is informed speculation that whereas we have maybe up to a billion barrels of oil out of the Paddvissie Fairway of Mossel Bay, there could be ten times that off the West Coast. So that is a very significant piece of news.
On why he’s feeling that this could change things
Because the feedback that I’m getting from people in the oil and gas business is that it’s doable, that the legislation looks like it’s not quite there yet, but it’s certainly the best effort so far. And if you look at the kind of money that they’re spending on exploration, Total, for example, has spent a good few billion on its Mossel Bay developments. They have to be quite serious about it to spend that kind of money. Just as an indication, if you want to drill one deep sea offshore oil well, it’s going to cost you in the order of about 500 million rand. Now often these things come up dry. So it’s a big money game. And they have to have at least a reasonable idea that in the future they’ll be able to get some of that back.
