Shell keen to start up Karoo drill

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By John Yeld

Cape Town - The first drilling rig to be used in the hunt for shale gas in the Karoo is “at least two years away and probably a bit more”, and possible commercial production won’t start for another eight to 10 years, says Shell SA.

In September the government lifted the 14-month moratorium on exploration for shale gas using the controversial hydraulic fracturing, or fracking, method, after the cabinet approved a report by an inter-departmental fracking task team that recommended the green light.

Shell SA had already applied for rights to explore for shale gas in three huge blocks across the Karoo totalling some 90 000 square kilometres, and two other operators, Bundu Oil & Gas and Falcon Oil & Gas, had exploration applications for other parts of it pending.

Jan Willem Eggink, the energy giant’s SA general manager upstream, told a media briefing on Wednesday that they had still not been granted their exploration licences and did not know when this might happen. Upstream is the industry term for all operations to get oil or gas from the ground while downstream refers to the distribution and sale of the products

He stressed there was no certainty that commercially viable quantities of shale gas existed in the Karoo, although there had been “encouraging” signs from test wells drilled by Soekor during the 1960s.

“We have to prove it first, we don’t even know it’s there... We don’t know how much will flow and there’s no certainty at all what our return will be. It may be zero, that is a possibility.”

However, they were “very keen” to start looking. If awarded its licences, the company was committed to drilling at least two wells and a maximum of eight in each exploration area.

The first step was an environmental impact assessment and the company was in the early stages of appointing an independent EIA practitioner, Eggink said.

The EIA phase would take at least two years and the exploration would last a maximum of nine years. If they found areas that appeared attractive for longer-term gas production they would decide which of these to use for production drilling after consultation.

The company “fully understood” Karoo residents’ concerns about fracking, most of which related to land use and water, Eggink said. They would consult with them and other interested parties in an attempt to select areas that were “of least concern” to everyone.

Responding to a question, he noted that a legal challenge to the go-ahead for fracking was being prepared but said this would probably be directed at the government.

“Will that set us back? Possibly, but it will be of no benefit to the country because that question (whether there is shale gas) will still be unresolved and the energy challenge (for SA) will get worse.” - Cape Argus

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