While the sub-Saharan Africa enclave remains one of the fastest growing and largest potential oil and gas regions in the world, the most notable challenge facing the sector is the lack of skills and an ageing generation of oil and gas professionals, said the South African Oil and Gas Alliance (Sagoa) CEO Ebrahim Takolia.

Speaking at an industry breakfast hosted by the Department of Trade and Industry and the Sagoa last week, he said South Africa had an abundance of potential in the sector that needed to be explored both on and offshore.

“Shale gas [in the Karoo basin] could be a game changer if we find it in a commercially viable volume, but 50% of the professionals in the sector will retire soon and we still have to compete against other regions. We need to put more [emphasis] on skills development,” Takolia held.

Also speaking at the breakfast, Standard Bank specialist Paul Eardley-Taylor said: “We believe that there is immense potential in [offshore and shale] gas in the country, and we endorse a [review] of the Mineral and Petroleum Resources Development Act (MPRDA) [Amendment Bill] in a more considered way. We believe [this legislation] needs to be right.”

His comments came as Parliament’s Portfolio Committee on Mineral Resources last week delayed its deliberations on changes to the MPRDA Amendment Bill.

Engineering News Online reported that potential investors had expressed concern about proposals in the Amendment Bill, which they said gave a large slice of revenue to government while companies had to bear all the risks of exploration.

Stakeholders demanded further clarity on a proposed 20% free-carried interest for the State in all new oil and gas ventures, with an option for government to buy a further 30% at market-related rates.

The Amendment Bill also proposed requirements for a 26% black economic-empowerment stake.

Citing “impressive figures” around the potential job-creation impact of a viable oil and gas market in Africa’s largest economy, Eardley-Taylor said, despite the legislative uncertainty, there was increasing investor interest and activity in South African offshore [and natural gas] acreage, with existing offshore investors including energy major Shell and mining major BHP Billiton.

“Summing up the prospective project cost results in some immense numbers over a ten-year period, with massive opportunities for South African oil and gas companies as well as the South African economy, including the services sector,” he commented.

Eardley-Taylor cited several companies and joint ventures prospecting for oil and gas in South Africa, including Cairn India and national oil firm PetroSA, which had signed a farm-in agreement for crude oil and natural gas exploration in the country’s offshore Block 1.

Similarly, energy group Anadarko and PetroSA recently signed an agreement for exploration rights over blocks 5, 6 and 7 of the offshore fields, where they planned to drill between one and two exploration wells over 2014 and 2015.

In addition, Sunbird Energy had acquired 76% of the production licence for the Ibhubesi gas field, off the West Coast, while PetroSA held the remaining 24%.

In June 2012, energy major Total submitted an application for exploration rights south of Block 9.

Meanwhile, Canadian Natural Resources had completed the conversion of their licence in blocks 11B and 12B, with Total having farmed-in. Drilling was targeted for the fourth quarter of 2014.

ExxonMobil recently acquired a 75% participating interest in Impact’s Tugela South exploration right and had submitted an application for exploration rights south-east of Sasol Petroleum International’s offshore block off the East Coast.