The future of offshore drilling in South Africa

South Africa is no stranger to companies wanting to use offshore drilling to search its coastal waters for oil and gas deposits. Mineral Resources and Energy Minister Gwede Mantashe supports offshore drilling as a boon to the struggling economy.

But, in February, the courts ruled against some offshore drilling efforts because of their impact on the environment and local communities. This has brought to light the dangers of this technique while raising questions about whether there is a place for it in an ever-warming world.

Offshore oil drilling

Offshore oil drilling is when companies and/or governments extract oil from under the seabed. This is done using huge oil rigs, which can house hundreds of people at a time. Some of these structures reach depths exceeding the heights of the highest skyscrapers.

The deepest offshore oil project in the world is the Stones operation, operated and owned by Shell, off the Gulf of Mexico. Stones reaches water depths of 2,900 metres and drills over 9,000 metres below the ocean floor.

Offshore drilling is popular because much of the Earth’s onshore oil reserves have been discovered. This is because onshore oil exploration and drilling has been going on for 150 years. But, much of the Earth’s offshore reserves remain undiscovered.

Offshore drilling is expensive, although not necessarily more expensive than onshore drilling. It can cost billions of US dollars and up to a decade to develop a deep water well. Deep water wells are those that reach depths greater than 300 metres.

Offshore drilling operations in and near South Africa

There have been a number of offshore oil and gas exploration operations on South Africa’s shores. At least 300 offshore oil and gas wells have been sunk since the first offshore well in South African waters in 1968.

Experts think there are nine billion barrels of oil and 11 billion barrels of gas under the seabed off South Africa’s coastlines. Former President Jacob Zuma stated this in a 2014 speech. He announced plans to drill at least 30 offshore oil and gas exploration wells over the following decade.

The Total discovery

Until 2019, the offshore drilling wells near South Africa were in shallow waters. That was until French oil company Total made the first major deepwater oil and gas discovery off South Africa’s coast. The discovery, made in an area off the southern coast known as Brulpadda, was thought to hold up to a billion barrels of oil equivalent, mostly gas but some oil as well. Mantashe hailed the find as a potential boon for the South African economy, which relies on imports for its gas and petrol supplies. The discovery could also see South Africa’s state-owned gas-to-liquids producer, PetroSA, ramp up operations, which had slowed due to low gas supplies.

In July 2020, Total sent a rig to the area to look for more oil in a section of the sea nearby the Brulpadda find, known as the Luiperd region. This was an unusual development, as offshore drilling had reduced worldwide due to the collapsing oil price, especially in Africa.

Total’s delay of its offshore drilling operations

In April 2021, Total said it was postponing these plans to explore further for gas and oil near its existing finds. Total said the decision was “as a result of the recent gas discoveries made and further ongoing geotechnical studies”. But, there was speculation that Total suspended its campaign to drill further because of uncertainty surrounding South Africa’s offshore exploration laws. Petroleum Agency SA CEO Phindile Masangane denied that this was the case when questioned by journalists.

Several international companies sold their stakes in various offshore drilling exploration rights in 2020, adding to speculation that policy uncertainty was turning investors away from gas and oil exploration in South Africa.

Other major offshore drilling plans

In September 2019, the Department of Mineral Resources approved a separate bid by Sasol and an Italian partner to drill for oil and gas off the coast of KwaZulu-Natal. Sasol had been trying to get this bid approved for several years.

In 2013, the Petroleum Agency of South Africa granted a three-year exploration right to Sasol to explore for gas and oil off the East Coast of South Africa. The following year, Sasol farmed this right out to Eni SpA (Eni), an Italian multinational. This meant that Sasol transferred 40 per cent of their interest in the area covered by the right to Eni.

In the years that followed, despite being granted the exploration right, the government repeatedly denied Sasol and Eni the environmental authorisations needed to start drilling. This was the result of numerous objections by communities, activist groups and environmentalists over the potential damage the drilling could cause to the KwaZulu-Natal coast.

The Department of Mineral Resources eventually gave Sasol and Eni the go-ahead in 2019. It did so despite the objections that had been raised. Presumably, this was because of Operation Phakisa, a new departmental initiative that translates as “hurry up”. The initiative aims to fast track the development of the ocean economy, including drilling for oil and gas.

Eni halts plans to partner with Sasol

In October 2021, Eni pulled out of its arrangement with Sasol. The company did not say why publicly, but there were reports that the decision was due to concerns over the technical difficulties of drilling in deep waters. There were also concerns over the regulatory and policy uncertainty around offshore exploration in South Africa, according to unconfirmed reports.

Activists are taking Sasol’s exploration permit to court. The applicants – the South Durban Community Environmental Alliance, Natural Justice and Green Connection – filed papers in June 2021. They argued that the government failed to properly assess the offshore drilling’s impact on key biodiversity areas. The case is ongoing.

Pros and cons of offshore drilling in South Africa

Mantashe maintains that exploring potential gas and oil reserves in the ocean is good for the economy. But, mounting opposition to offshore drilling has exposed the dangers of offshore fossil fuel exploration. For example, 14 fishermen stopped an attempt by Australian company Searcher from starting seismic blasting between Cape Agulhas and the Namibian border. The fisherman successfully argued that they had not been properly consulted when the exploration permit was granted. They also said that the seismic blasting would clear the area of fish they relied on to make a living.

Seismic blasting is when survey vessels, like the one used by Searcher, use airguns to fire blasts of compressed air into the seabed every 10 to 15 seconds. The blasting makes sound waves, which bounce back from the seabed, mapping out the location of oil and gas reserves.

Experts say the sound is hugely dangerous for many types of marine life. The blasts can be a million times more powerful than whale sounds. It can kill some marine life more than a kilometre away and damage the hearing of some animals, like whales and dolphins. This makes it hard for them to communicate. It also has severe effects on their ability to locate food and mate.

In December 2021, a court temporarily stopped Shell from undertaking seismic blasting off the coast of the ecologically sensitive Wild Coast. The court underlined the rights of coastal communities, which hold customary and fishing rights. These communities rely on the sea for economic and religious reasons.

No new oil or gas

Ethical and legal reasons aside, climate change is another reason why experts say offshore drilling is a problem. The International Energy Agency said in 2021 that governments must not allow any more oil or gas developments if the world is to keep global warming in check. This means achieving the targets set by many nations to reach net zero carbon emissions by 2050.

Net zero means that the greenhouse gases emitted into the atmosphere are balanced out by those that are removed. This is the moment at which global warming stops. The Intergovernmental Panel on Climate Change says that the world must reach net zero by 2050. This is if it is to keep global warming below 1.5°C, to avoid the worst effects of climate change.

Despite these warnings, many of the world’s largest banks continue to fund new oil and gas developments.

Oil spills are another danger

Environmentalists have also raised concerns about the possibility of oil spills. Thousands of these spills happen in the US every year, causing serious damage to the ocean and contaminating food sources.

Globally, there has been an average of 1.8 large oil spills every year in the past decade, although the number of oil spills has decreased over the last 40 years. The most famous and largest oil spill in history is the Deepwater Horizon spill of 2010.

Deepwater Horizon drilling rig

On April 20, 2010, an underwater well-head owned by BP exploded, killing 11 people on board the Deepwater Horizon rig in the Gulf of Mexico. The rig sank. The ensuing oil spill lasted 87 days, spewing over 3.19 million barrels of oil into the water. The environmental and ecological damage caused was severe. This included dolphin and turtle strandings, low birth rates in marine animals and devastated coastlines.

A BP investigation revealed that a number of technical and mechanical failures on board the rig had caused the explosion. An investigation by the Associated Press revealed over 27,000 abandoned oil wells in the Gulf of Mexico, some of which date back to the 1940s. The publication called the area an “environmental minefield”.

BP finally plugged the leak on 19 September, 2010 after spending nearly USD $10 billion on clean-up efforts. A White House investigation revealed that BP’s contractors Transocean and Halliburton shared responsibility for the disaster.

Was it a mobile offshore drilling unit?

The Deepwater Horizon was a semi-submersible mobile offshore drilling unit. This type of rig is designed for offshore drilling in ultra-deep waters and is usually anchored to the seabed.

Future of offshore drilling in South Africa

Despite warnings from environmentalists, communities and experts, offshore drilling will likely continue in South Africa. This is because it is seen as an economic opportunity. But, many more offshore drilling contracts are likely to land up in the courts. This will test the legality of this controversial technique in a warming world.