SA to grant new onshore gas licences

2011-03-08 14:04

Cape Town - South Africa expects to hold up to four onshore licensing rounds before the end of 2012 as interest grows for shale gas in the southern Karoo region despite opposition, a senior official said on Tuesday.

Farmers fear methods used to extract shale gas in the semi-arid Karoo will contaminate water and harm the environment as South Africa, which is a net oil importer, strives to reduce its dependence by opening up new areas of exploration for alternative energy sources.

Oil major Royal Dutch Shell, Anglo American [JSE:AGL], petrochemicals group Sasol [JSE:SOL] and Chesapeake Energy are among those eyeing the Karoo, which may hold substantial deposits of gas in shale.

"We envisage a number of licensing rounds which will take place between now and the end of next year," Mthozami Xiphu, chief executive of Petroleum Agency South Africa, which regulates exploration, told Reuters.

"We should have about three or four onshore licensing rounds starting from the second half of this year."