Shale gas could make S.African energy self-sufficient: Shell

CAPE TOWN (AFP) - Anglo Dutch energy giant Shell said Thursday that shale gas could potentially meet South Africa's future energy needs if controversial "fracking" drilling uncovered large deposits.

The company would spend $200 million (140 million euros) to explore for gas in the vast Karoo semi-desert region if granted a licence to drill and any development would run into billions of dollars, said Shell South Africa upstream general manager Jan Willem Eggink.

"If exploration efforts prove that the shale contains commercially producible gas, and that still has to be proven, then South Africa could see production from this source within a decade," he told the Cape Town Press Club.

"If the volumes are even half the amount that the [US] Energy Information Administration quotes at the moment, then there will be sufficient energy for decades to come for South Africa and there is a good chance you will be self-sufficient for that whole period in energy."

Shell is one of several companies that want to prospect in the central Karoo which has sparked an environmental outcry over the use of hydraulic fracturing drilling to release underground resources.

Exploratory drilling was needed to establish if gas could be extracted in commercial quantities and an environmental impact assessment if a licence is granted, Eggink told the Cape Town Press Club.

The project could potentially ease coal-hungry South Africa's energy deficit, its carbon footprint and lead to "significant" direct foreign investment, he said.

"We will spend at least 200 million dollars for the first phase of the exploration work. If you go later into development, I think you're talking about billions and billions of dollars," he said.

South Africa's government has frozen applications and decisions on current bids while it conducts a study into the impact of the process which blasts a mix of water, sand and chemicals into hard rock to release gas locked inside.