South Africa presents a diverse range of lucrative investment opportunities for enterprises operating within the oil, gas, and power infrastructure industries.
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Gwede Mantashe, Minister of Minerals and Petroleum of South Africa |
In April 2024, South Africa unveiled its draft Gas Master Plan (GMP), a strategic policy instrument designed to ensure a secure and diversified gas supply from both local and international sources.
The GMP outlines projected demand, essential infrastructure requirements, and targeted capacity goals. It aligns with policies like the Gas Integrated Power Producer Procurement Program, which aims to procure 2 GW of new generation capacity from land-based gas-fired power facilities. As a relatively untapped hydrocarbon market, South Africa presents lucrative opportunities for companies involved in exploration, production, and infrastructure development within the energy sector.
To attract investment in South African oil and gas, South Africa’s Minister of Minerals and Petroleum Gwede Mantashe will attend the African Energy Week (AEW): Invest in African Energy conference, which will take place from November 4 to 8 in Cape Town. Minister Mantashe’s participation aligns with national efforts to promote oil and gas development across the country, as the government seeks to enhance energy security and nationwide industrialization.
AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit http://www.AECWeek.com for more information about this exciting event.
Given the pressing need to bring new energy sources online in South Africa, the government is promoting investment in frontier exploration. Offshore, proven potential in neighboring Namibia has further enhanced the attractiveness of the South African Orange Basin. A string of billion-barrel finds were made in Namibia between 2022 and 2024 and a combination of independent and major energy companies have recently farmed-in to South African blocks in the hopes of unlocking similar discoveries.
Energy majors TotalEnergies and QatarEnergy acquired participating interestes in Block 3B/4B this year. The transaction provides the companies with a 33% stake and a 24% stake, respectively. Additionally, oil and gas exploration company Eco Atlantic – through its wholly owned subsidiary Azinam South Africa – signed a farm-in deal for a 75% working interest in South Africa’s Block 1, also situated in the Orange Basin. The company assumed operatorship of the block, which is estimated to be one of the largest in the basin. These transactions are just the start, with South Africa’s offshore basins offering a rich combination of undeveloped and unexplored acreage.
Onshore, South Africa is making great strides towards leveraging gas resources for both power generation and fuel-related purposes. The country’s shale formations in the Karoo Basin are estimated to hold as much as 209 trillion cubic feet of gas resources, making it a highly attractive onshore play. Several projects are underway. Independent E&P company Panoro Energy applied for an exploration right for helium and natural gas in the basin in June 2024. This project scope comprises a three-year work program and will enhance the geological understanding of the basin. Additionally, gas explore Kinetiko Energy is progressing with a five-well gas flow testing program in the Mpumalanga province, expected to start in Q3, 2024. The campaign aims to identify high-flow rate gas zones in exploration rights 271 and 270.
Beyond exploration, South Africa is seeking partners to invest in energy-related infrastructure, including hydrogen, power generation and transmission, refining and distribution. Gas-to-power has been identified as a priority industry for the country, given rising power demand and emerging resource potential. The country’s Integrated Resource Plan 2023 – a comprehensive plan to bring new generation capacity online – shows that South Africa requires between 7.2 GW and 8.6 GW of new gas-to-power capacity to support industrialization and electrification efforts. This highlights a strategic opportunity for both upstream players and downstream investors.
“To address its energy crisis, South Africa needs natural gas. Exploration campaigns in both onshore and offshore basins have made clear the significant reserve potential in the market. Yet, lack of investment continues to hinder development in the sector, further restricting the country’s efforts to enhance energy security. It is great to see companies entering the South African side of the Orange Basin but much more needs to be done to maximize the country’s oil and gas reserves,” stated NJ Ayuk, Executive Chairman of the African Energy Chamber.
Minister Mantashe’s return to the AEW: Invest in African Energy conference underscores a commitment by the ministry to maximize the development of the country’s oil and gas resources. During the conference, Minister Mantashe will connect with investors, technology providers and regional counterparts while driving discussions on investment opportunities, regulatory support and national energy priorities.