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Shell to invest US200 million in Karoo shale gas exploration

Cape Town, South Africa — ESI-AFRICA.COM — 02 September 2011 – Royal Dutch Shell has announced that it hopes to invest US$200 million to explore for shale gas in the Karoo “’ plans facing tough opposition from farmers and greens worried about the environmental impact.

Ecological concerns led the government to place a moratorium on oil and gas exploration licences in the region, where the controversial shale extraction technique of hydraulic fracturing or ‘fracking’ might be deployed.

“If exploration efforts prove that shale contains commercially producible gas volumes, then South Africa could see production from this source within a decade,” Jan Willem Eggink, general manager: upstream ventures for Shell’s South African unit, told a news conference here.

Petrochemical group Sasol, Anglo American and Falcon Oil and Gas are among those eyeing shale gas in the region, with Shell leading the pack with exploration rights pending to an area of

Farmers and conservationists are worried about the possible impact of fracking, in which drillers blast millions of litres of water, sand and chemicals at high pressure into underground rock to create cracks for the gas and oil to escape.

The sparsely-populated Karoo is renowned for its rugged scenery and is home to rare species such as the mountain zebra and riverine rabbit, putting it high on the radar screen of conservationists.

Those in favour of fracking in the Karoo say the discovery of gas would help South Africa plug a chronic power shortage and reduce dependence on harmful coal-fired power stations. “By drawing on potential abundant domestic gas supplies, you can meet rising energy demand while maintaining energy security,” Eggink said.

He added that he believed South Africa could well have at least half of an estimated 13.73 trillion m³ of trapped shale gas “’ enough to be commercially viable and allow the country to become energy self-sufficient for decades to come.