Recent discoveries of major oil and gas deposits in southern Africa could dramatically improve the prospects for southern African countries resulting in the reduction of imports, driving economic growth, and lowering carbon dioxide levels in power generation.

Roughly 2 years ago 500 trillion cubic feet of gas was discovered across Mozambique and South Africa, along with 11 billion barrels of oil in Namibia, jointly equating to an amount of in gas reserves equal to those of Canada or Venezuela. Such oil and gas deposits have the potential to enhance and significantly enhance the southern Africa region.

New Oil & Gas Deposits

Offshore gas estimates for Mozambique has resulted in much attention and activity. The largest potential reserves are in South Africa’s shale beds beneath the Karoo region, projected to exceed 400 tcf.  Due to hydraulic fracturing techniques, these reserves can be extracted in an economically feasible way. Furthermore, oil deposits projected at 11 billion barrels were discovered off the coast of Namibia a year ago. This discovery has prompted additional investigation along the west coast of South Africa in the Orange River basin which is an extension of the Namibian fields.

Southern Africa’s Energy Outlook

Southern Africa’s economy is based on coal. South Africa’s number one source of crude oil is Iran, followed by Saudi Arabia, Nigeria, and Angola. South Africa’s total refining capacity is 250 million barrels per year, or about 700,000 barrels per day.

Southern Africa has abundant and cheap sources of coal, making it still the primary energy source. The region’s coal-fired power fleet is the cheapest option for producing power and at current coal production, reserves could last at least a century.

Electricity Generation

Gas is a low-cost, flexible power source, offering generation above the base load in peak-demand periods. Replacing expensive diesel generation during these hours would also contribute to reducing the cost of electricity generation for the region.

 

Coal is expected to maintain a high position in the southern African energy mix. The South African Department of Energy’s Integrated Resource Plan expects a coal share of 46% in the next 20 year.

Gas generation too influences enabling the build-up of renewable energy sources. Wind and solar units experience down periods when they cannot generate due to intermittent loss of wind or when clouds block the sun. The more southern African countries develop renewable energies, the greater will be their need.

 

In conclusion, as gas generates merely about half the CO2 emissions of coal and two-thirds those of oil-fired power facilities, increasing the gas share would significantly lower South Africa’s overall.

Check Point