Fracking to move ahead - Shabangu

Cape Town 120207- Minister of Mineral energy and mining industry at a press conference in Westin Hotel.Picture Cindy waxa.Reporter Dineo/Business Report

Cape Town 120207- Minister of Mineral energy and mining industry at a press conference in Westin Hotel.Picture Cindy waxa.Reporter Dineo/Business Report

Published Feb 5, 2014

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Johannesburg - South Africa would move ahead “decisively” with the exploration of shale gas, and “geology indicates” a potential for 485 trillion cubic feet of shale gas trapped in the formations of the Karoo region, Minister of Mineral Resources Susan Shabangu told delegates at the Investing in African Mining Indaba in Cape Town yesterday.

“We will move ahead decisively, yet responsibly, with the exploration of shale gas,” Shabangu said, adding that the government would “unleash” the potential of shale gas to provide “cost-competitive energy security” and create jobs.

The government had published the technical regulations for development of shale gas for public comment, and the final regulations would be released shortly, Shabangu added during her keynote address at the four-day event.

Shabangu said legislation governing the exploration would come soon. “We have published the technical regulations for the development of shale gas for public comments and the final regulations will be released shortly.”

Environmentalists have opposed the drilling for shale gas by hydraulic fracturing, or fracking, in the Karoo region, saying it has the potential to poison the arid area’s underground water supply.

The process involves drilling wells up to 4km deep, before pumping in a cocktail of water and chemicals to crack the shale rock and release the gas.

President Jacob Zuma said last year that exploitation of shale gas had the potential to transform South Africa’s economy by, among others, reducing the price of energy.

Shabangu said South Africa was also nurturing the development of its offshore oil and gas prospects and the country “welcomed” a number of multinationals that had expressed interest in the development of “this resource”.

Shabangu also gave assurances to investors that the ongoing amendment of the mining regulations would not harm their businesses, but did not address the underlying issues in the labour environment in her address to the delegates.

Shabangu maintained that proposed amendments to the Mineral and Petroleum Resources Development Act would not create an uncertain regulatory regime.

The Mineral and Petroleum Resources Development Amendment Bill has been widely criticised for, among other things, giving the state discretion to declare certain minerals, including coal, as strategic.

“We are going to regulate the declaration of strategic minerals, and people will be invited to give inputs before a decision is made. You can declare anything strategic, but if you find that it is useless, then it is not worth it,” Shabangu said.

The bill entitles the state to have a “free carried interest” of 20 percent in new oil and gas exploration ventures, which Shabangu reiterated was “non-negotiable”. - Business Report

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