Oil and Gas | Dr Bongani Sayidini on economic, societal benefits of exploration

[00:00:00]Courts have recently found themselves hearing cases brought forward by concerned communities who look to block the exploration of oil and gas resources in their vicinity. The protection of the environment and local livelihoods has been the most concerning part of it.

[00:00:14]Despite a number of rulings blocking industry plans, the search for an approach to exploration that is respectful of communities and considerate of the environment continues. CEO of the Petroleum Agency South Africa, Dr. Bongani Sayidini, joins us now for more in studio.

[00:00:31]Bongani, good evening. Thank you so much for joining us. Really do appreciate it.

[00:00:35]Um perhaps let's start with the work that the agency does. The South Petroleum Association of South Africa.

[00:00:41]It's a statutory body that does incredible work, incredibly important work rather, um in the regulation of the oil and gas space. Uh what is the statutory mandate of of the South African Petroleum Agency?

[00:00:54]>> Good evening, Oliver, and good evening to the viewers of this program.

[00:00:59]Uh our role, uh derives from the MPRDA, of course, which is the Mineral and Petroleum Resources Development Act.

[00:01:09]Uh we have this role designated to us by the Minister of Mineral and Petroleum Resources.

[00:01:17]It is the promotion of exploration and production in South Africa.

[00:01:24]So, we, as part of our role, need to assess the petroleum prospectivity of South Africa and promote such activity, uh for investment, mainly for energy security of supply, as well as social economic development.

[00:01:42]So, part of our role is to therefore process applications for petroleum rights, uh which range from reconnaissance permits all the way to production rights.

[00:01:55]So, we are the regulator of the petroleum sector in South Africa and a nutshell.

[00:02:01]>> So if I wanted to explore and or extract produce, I would have to approach you and apply for the rights to do so from the organization that you're head of.

[00:02:10]>> Yes. Yes, of course.

[00:02:12]>> Okay. Let's talk about that process because it's been subject of immense litigation.

[00:02:17]Describe to us in a nutshell how one comes about to obtain successfully a petroleum and gas exploration license and then further to that a oil and gas production permit in South Africa.

[00:02:34]>> Maybe part of our role, let me start there, is we are the national we are the custodian of the national petroleum data base.

[00:02:42]Meaning all the acquisition of data that has ever occurred in the country dating back to the 1960s is sitting with the Petroleum Agency SA.

[00:02:55]So when applicants want to apply for a production for a petroleum right that is either exploration right or a permit in terms of a reconnaissance permit for example they first access data through us.

[00:03:13]Data that gives them an indication in terms of areas that may be of interest to them.

[00:03:20]They they then propose So once they've indicated or they've identified an area of interest in their application they propose what is called an exploration work program and they also propose a budget and associated budget as part of that application.

[00:03:39]We then assess the application in terms of both the work program as well as of course the associated budget.

[00:03:47]>> Mhm.

[00:03:48]So let's then explore an area of interest and that is in the case of South Africa at least, the Orange Basin. It's a body of water in the deep sea ocean off of the west coast of South Africa that we share with Namibia. And in some interest in some instances, there's some geological relationship between the Orange Basin and what's happening in Mozambique and to an extent what's happening in Angola.

[00:04:13]Is there oil in and gas in the Orange Basin across just off of the coast of the west coast of South Africa?

[00:04:21]>> In fact, the Orange Basin is one of the most active and prolific petroleum regions globally currently.

[00:04:31]>> Yeah.

[00:04:32]>> The Orange Basin which straddles both South Africa and Namibia is such that the the majority of that basin is in South Africa. About 65 to 75% of the Orange Basin is in South Africa.

[00:04:48]Namibia has explored its Orange Basin over the last over the last 3 years for example.

[00:04:56]This is from 2022 by and large.

[00:05:00]>> Well, that's when they've had discoveries in the Orange Basin, prospecting has long preceded that.

[00:05:04]>> Of course, of course. So, discoveries have taken place in Namibia really proving that basin to be prospective since 2022. So, over the last 3 years to 4 years, you've had active exploration in Namibia.

[00:05:20]Drilling of wells to the extent that I think today about 25 exploration wells have been drilled in that country. That is exploration and appraisal wells.

[00:05:32]The majority of which have been successful.

[00:05:36]That exploration drilling has proven up the Orange Basin on the Namibian side.

[00:05:41]We've got analogs on the South African side, look-alikes in terms of prospects with the with the discoveries in Namibia.

[00:05:51]And taking into account that 65% to 75% of that basin is in South Africa, the prospectivity in South Africa is significant. Potential in South Africa is is significant. We already see about 16 billion barrels in prospectivity on the South African side. Namibia has already discovered in excess of 10 billion. We see 16 billion and growing in terms when we feed back the results that we see from the Namibian side.

[00:06:24]>> Yeah. So, why why are you subject to so much litigation in the Orange Basin, right? And there are two big cases that South Africans know, that is the Shell case from several years ago that seemingly was ongoing until the up until the Constitutional Court recently. And then there's the TGS Geophysical case, right? I don't want to go into the details of each of these cases. Uh but perhaps the takeaway is that the accusation is that the South African government, and you being an agency of the government, gives very little consideration to the environmental impact assessments that have been done or in some instances have not even done sufficient environmental impact assessments for the purposes of exploration and then later on for the purposes of extraction. Uh is that true?

[00:07:05]And perhaps explain to us how the environmental impact assessment criteria actually works. We know that there was a big litigation uh at some point between the Minister of Petroleum and Petroleum Resources, which uh at the time was still DMRE, and the Minister of Environmental Resources at the time, and they found each other in terms of what action needs to happen in terms of environmental impact assessment. The Minister of Environment then cleared up that policy uncertainty. But from an opera uh when you operationalize it, what is supposed to happen in environmental impact assessments?

[00:07:38]In a nutshell, uh in fact, before any exploration activity can take place in this country, particularly activities that are intrusive.

[00:07:52]That That means uh drilling in particular, but also activities that are not necessarily intrusive, such as seismic acquisitions that you've mentioned. You've mentioned the Shell case, which was on seismic acquisition. You've mentioned the TGS case. So, before any of those activities can actually take place, there's an There's an environmental authorization process that is required uh in law.

[00:08:22]That environmental authorization process is encored uh by an environmental impact assessment. That's in terms of the NEMA environment environmental impact assessment regulations. So, there's a There's a legal framework in the form of the NEMA. There is the a regulatory framework in the form of the related regulations that guide the environmental impact assessment.

[00:08:48]That environmental impact assessment, of course, is supposed to assess up front the potential environmental impact of the planned activity being seismic acquisition, being drilling.

[00:09:01]Out of that process, of course, as part of that process, there's a a public participation.

[00:09:08]Interested and affected parties participate in that process. There's a period of public participation period or process.

[00:09:17]Uh so, coming out of that process is supposed to be They are supposed to be certain conditions in terms of the environmental impact assessment. There is also supposed to be an environmental management program that arise out of that that process. Which environmental management program outlines mitigation measures in terms of the risks that might be associated with whatever activities proposed being it sub-seismic or drilling.

[00:09:48]>> Okay.

[00:09:48]>> So, we have quite a rigorous process. I mean, there are rigorous guidelines, the EIA regulations themselves in terms of how that environmental impact assessment should be done. And it is done by independent environmental assessment practitioners.

[00:10:06]>> As an organization and as a statutory empowered body, how do you make the assessment between the economic upside of oil and gas exploration and the extraction thereof versus the environmental impact that said activity might have? Because it's not a zero-sum game, right? There is a trade-off that's being made. How do you make that balancing act assessment?

[00:10:30]>> The So, the Okay. The environmental impact as it relates to oil and gas activities, for example, whilst it's rigorously assessed, there are mitigation measures that are put in place.

[00:10:45]Oil and gas in this country, I'll make an example in South Africa, >> Yeah.

[00:10:49]>> has had very minimal impact on the environment or no uh detrimental impact at all. Yeah. I'll make an example. Over the last Since 2010, for example, so the last 15 years, there's been at least or close to 30 about 29 uh seismic acquisitions that have taken place in this country.

[00:11:14]So, the matters that the seismic acquisition that is in court, for example, there's been 21 uh 29 similar activities.

[00:11:23]We don't know of any negative impact that has that has occurred as a result of that. In In the same area that is now under legal review in terms of the TGS case.

[00:11:35]There was a seismic acquisition that was acquired by Searcher, for example, another seismic acquisition company in 2024.

[00:11:44]No impact, successfully done. This is at the time when the the the TGS environmental authorization is being challenged. So, we've had seismic acquisitions without any detrimental impact. We've had drilling.

[00:12:00]There has been at least 300 wells drilled offshore South Africa.

[00:12:06]There's about 200 onshore wells, so wells that have been drilled in this country. No one can really point to any negative impact. There's been production of oil and gas in this country near Mossel Bay, South Coast, since 1992. Exploration dates back to 1965, and that exploration involves seismic acquisitions, drilling, no impact.

[00:12:31]>> Yeah. Well, look, if we take this conversation any further, we're going to end up litigating relitigating the TGS geophysical case as well as the Shell case, but I think this has been incredibly important and informative.

[00:12:42]Mongane Saitini, thank you so much for your time. Really do appreciate it.

[00:12:44]Mongane Saitini is the CEO of the Petroleum Agency of South Africa.