E&Ps Await South Africa's Approval Of Shale Gas Regulations

July 8, 2015

South Africa’s government is set to approve regulations for the shale-gas industry that will clear the way for companies such as Royal Dutch Shell Plc and Falcon Oil & Gas Ltd. to press ahead with exploration programs.

“The regulations will go before Cabinet at its next meeting in two weeks” and be published in the government gazette within a month, Mineral Resources Minister Ngoako Ramatlhodi told reporters in Cape Town on Thursday.

South Africa’s semi-desert Karoo region may hold as much as 390 trillion cubic feet of shale gas, which the government wants to tap to alleviate energy shortages. Environmental groups oppose its extraction, saying the process may contaminate underground water supplies.

Companies will have to conduct environmental impact assessments and consult with local communities before drilling, said Thibedi Ramontja, the director-general of the Department of Mineral Resources. Exploration was expected to take about three years, and the process would determine the size of the gas reserves and their economic viability, he said.

A number of issues had been addressed in the regulations, including ensuring that exploration didn’t interfere with an international radio telescope project being developed in the Karoo, known as the Square Kilometer Array, Ramatlhodi said.