The South African petroleum regulator says Total Energies 11B/12B offshore gas field could make a direct annual contribution of at least 8 billion rands ($457 million) to the country’s coffers.
It is reported by Independent Media Online, that the country’s regulator said this on Thursday and this is not just the overall GDP contribution but a direct contribution to the fiscus.
This comes after the energy company lodged its production licence application for Block 11B/12B on September 5 before a deadline expired which might have seen the oil major forfeit its right to develop two huge gas field discoveries – Brulpadda and Luiperd off South Africa’s southern coast.
“That is not just the overall GDP contribution but is the direct fiscal contribution from the royalties as well as the primary taxes,” Phindile Masangane, chief executive at the Petroleum Agency of South Africa (PASA), told delegates at an oil conference.
Although new gas and oil projects are being challenged in courts amid environmental concerns, the development of the field will represent a major milestone in South Africa reducing its dependence on imported oil and refined petroleum products.
Quoted by the daily publication’s business section, another PASA official, Bongani Sayidini who is the chief operations officer, he said the country has an estimated 60 trillion cubic feet (TCF) of offshore gas prospects.
Sayidini said phase one of Total Energies’ deep-water field could cost up to an estimated 45 billion rand to develop with the first gas seen in 2027.
“Discovered volumes can sustain 560 million standard cubic feet per day,” Sayidini said.
The COO explained that such volumes are enough to supply a gas-to-liquid refinery in Mossel Bay currently operating well below capacity due to feedstock shortages.
Moreover, he added suggested that excess gas could potentially supply converted Eskom power plants or even a newly-built 3,000-megawatt power plant.
Total Energies is the operator with joint venture partners in Block 11B/12B including Qatar Energy, Canadian Natural Resources, and local consortium Main Street.
The Gazania-1 well is targeting two low-risk prospects by operator Eco Atlantic Oil & Gas and its joint venture partners Africa Energy, Panoro Energy, and Crown Energy.
Main Image: Total Energies/Dovetail
