Hydrocarbon exploration licenses totaling 30,132km2 were awarded to six junior mining companies. The licenses, awarded by Petroleum Agency SA (PASA), entitle the young exploration companies to prospect and eventually drill exploratory wells in the Northern Cape, North West and Free State with a total risked mean Gross Petroleum Resource Potential of 1,062 billion barrels.

The awarding of exploration licenses on a cumulative acreage of this size - twice that of Gauteng - is a clear indication of the Department of Minerals’ and PASA’s commitment to finding alternative sources of energy in the form of oil and gas. 

“It’s exciting as it shows that exploration, particularly onshore, is getting the backing it deserves. And we are buoyed by the recent developments around liquefied natural gas prospects, as some of our assets lie adjacent to territories with known gas seepages,” says Chris Dorrington, Managing Director of ORM Exploration, one of the six companies to receive new exploration licenses.

“We have spent the better part of the last ten months conducting preliminary research into identified anomalous areas with technical co-operation permits and, though very early stage, the results are promising,” adds Dorrington.

There has been very little hydrocarbon exploration activity onshore in South Africa when compared with offshore to date and this makes current exploratory efforts critical.

The six license recipients form part of venture capital outfit, Alumni Energy Investments, a locally registered Section 12J fund. Alumni Energy Investments CEO, Shakes Motsilili: “There are no onshore seismic or other data studies of any significance available to date, so we are, in effect, pioneering a big data approach to hydrocarbon exploration. This will be our primary focus for the three year duration of the new licenses. And it’s important that we are able to do it at scale.” 

The exploration right means that Alumni Energy Investments can now perform on the ground activity, including taking soil samples, telluric analysis and should the data prove compelling enough they are permitted to conduct exploratory drilling, subject to meeting environmental impact assessment criteria.

“This is going to require a significant exploration programme. It’s a big step towards implementing what we hope will lead to a natural gas to electricity strategy in a relatively short timeframe. Such a large acreage has the potential to change the energy landscape should it lead to even a modest hydrocarbon find,” concludes Motsilili.