When lifting the moratorium in September 2012, the South African Government made it clear the exploration could not yet include the controversial technique of hydraulic fracturing or fracking. The country’s outdated gas regulations are currently being amended to include new developments, including unconventional gas.
The Water Research Commission has only just begun its research into fracking’s possible impacts on groundwater in the Karoo.
As a result, exploration licences have still not been issued to the current three applicants: Royal Dutch Shell (concession area of 90 000 square km), Falcon Oil and Gas (concession area 30 000 square km) and Bundu Gas & Oil Exploration, owned by Challenger Energy (3 200 square km). And the licensing process is unlikely to happen before 2014.
Only once exploration licences are issued will the applicants declare where they will explore within their concessions. An Environmental Impact Assessment process will then begin for each site. Royal Dutch Shell has indicated it will drill a minimum of 8 and a maximum of 24 wells across its three adjoining concessions over three to nine years.
Shell has not announced where it will obtain the millions of litres of water needed for each fracking event, but has said it will truck the resulting toxic wastewater from exploration to hazardous waste disposal sites in the Western Cape or Gauteng.
In December 2012 Falcon (listed in Toronto and headquartered in Dublin) entered into joint venture partnership with Chevron to explore the Karoo Basin. Falcon had previously indicated it will not explore by drilling or fracking, but will initially use only seismic testing.
Bundu Gas and Oil has not made their method of exploration public.
Sungu Sungu and Others
But these are not the only fracking applicants in the massive Karoo basin. Other companies have been granted Technical Cooperating Permits (TCPs), allowing them to do desktop studies on shale in their concessions, prior to being granted permission to prospect.
They include Sungu Sungu which has two concession blocks totalling 100 000 km2 covering parts of the Northern Cape, Free State, KwaZulu-Natal and North-West Province. Unknown company Moonstone has a TCP for the Kalahari region just south of the Kgalagadi Transfrontier Park.
Sasol, in partnership with Chesapeake Energy and Statoil, allowed its TCP to lapse over a massive concession that covered most of the Free State and a large area of KwaZulu-Natal. The company said preliminary results did not look promising and drilling costs in South Africa would be six times higher than in Canada, where they also have fracking interests.
Dolerite – the Wild Card
In June 2013, the US Energy Information Administration report lowered its previous estimation of South Africa’s shale gas reserves from 485 trillion cubic feet (tcf) to 390 trillion cubic feet, mainly because of the “geologic complexity caused by igneous intrusions into [the Whitehill Shale Formation]”.
The Karoo is the only shale gas field in the world that is riddled with dolerite, also known locally as ironstone. It originates from volcanic action 180 million years ago. Dolerite is extremely hard, is a known preferential pathway for fluids, and Jan-Willem Eggink of Shell has admitted they would like to steer well clear of it.