Falcon Oil and Gas Ltd.

AS FRACKING in the country edges closer to reality, natural gas exploration is increasingly attracting new players.

But not all companies expressing interest in natural gas exploration are interested in fracking. Petroleum Agency of South Africa acting CEO Lindiwe Mekwe confirmed two new players have entered South Africa’s natural gas arena.

Technical co-operation permit applications from British Virgin Islands-based Rhino Resources and European oil and gas company Cairn were aimed at studies on the potential to exploit natural gas and gas and condensate, Ms Mekwe told Business Day.

Mineral Resources Minister Susan Shabangu said last week that South Africa planned to issue licences permitting the exploration of shale gas reserves in the first quarter of next year.

South Africa published draft regulations on hydraulic fracturing, commonly referred to as fracking, on October 15. A 30-day public comment period follows on it.

Cairn has a permit for an area encompassing Port Elizabeth in the Eastern Cape while Rhino has a permit for an area of KwaZulu-Natal stretching from Durban to Ulundi (west of these centres) and various smaller pockets.

The International Energy Agency said this year natural gas would continue to raise its share of the global energy mix, growing at 2.4% per year to 2018.

These natural gas applications have been added to those already granted — for shale gas, which requires fracking — to three companies, Royal Dutch Shell, Bundu Gas and Oil, and Falcon Gas and Oil.

They have inactive exploration rights, because nothing can be done until the new regulations are passed, Ms Mekwe said.

These rights are all for the Karoo Basin, estimated to hold as much as 485-trillion cubic feet of resources, one of the largest shale beds in the world.

Meanwhile, a study from the University of Texas shows methane emissions from fracking can be almost completely avoided if the right equipment and techniques are used.

Methane is a greenhouse gas considered a greater risk than carbon dioxide for climate change.

The study involved nine oil and gas companies, including Shell. The team found all nine companies had equipment in place to reduce methane emissions by 99%.