License decision expected on South African shale gas exploration

08:16, March 11, 2011      

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A round of licensing for the controversial exploration of South Africa's shale gas deposits will be held before the end of 2011, according to Mthozami Xiphu, chief executive of Petroleum Agency South Africa (Pasa).

The Business Day newspaper in Johannesburg reported on Thursday that Xiphu said periodical licensing rounds, instead of first-come, first-served criteria, will be the best measure to manage growing interest in the shale gas resources in South Africa's semi-arid Karoo region.

Pasa is the South African government agency which regulates exploration for the country's onshore and offshore oil and gas.

Business Day said several companies, including Royal Dutch Shell and South African petrochemicals group Sasol, are seeking rights to explore for shale gas in the Karoo.

South African mineral resources minister Susan Shabangu in February placed an indefinite moratorium on the processing of all new exploration and production rights in the Karoo.

Xiphu said the moratorium was a measure needed to pave the way for the licensing rounds. He explained there could be up to four rounds of licensing.

By August 2011, a final decision on Shell's application was expected.

However, the prospect has drawn opposition from South African landowners and farmers.

Opponents are worried about, the effect the exploration activities will have on water quality and availability in area of South Africa where water is scarce.

Xiphu confirmed that environmental issues played a role in the decision making exploration licenses.

Those for and against both cite the global drive for a reduction in greenhouse gas emissions to bolster their arguments.

In addition, they note South Africa's commitment at the 2009 United Nations climate change conference in Copenhagen, to reduce its greenhouse gas emissions 34 percent by 2020.

Shell South Africa Vice-president and Chairman Bonang Mohale said in Johannesburg last week that shale gas extraction will transform South Africa's hydrocarbons market.

"Natural gas could reduce South Africa's dependence on coal, upon which we depend for 95 percent of our energy supply, reducing carbon emissions by between 50 percent and 70 percent," he said.

Richard Worthington, World Wide Fund for Nature climate change manager, said the carbon footprint for shale gas appears to be no less than petroleum and could be as bad as coal.

Source: Xinhua
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