Often not understood is that oil and gas exploration companies do not as a rule go public with detailed technical information on all their gas exploration activities and time periods. They keep their technical and commercial intellectual property (IP) to themselves. Even those gas exploration companies that are listed must be cautious and conservative because they are subject to stock exchange rules governing their disclosures and forward-looking statements. If you read the legal disclaimers on a public announcement made by a listed gas exploration company, you will see this to be true.
Because gas exploration companies, including those in South Africa, do not make all or only some of their exploration and appraisal activities public, this cannot be translated to mean, as many research reports seem to suggest, that there are no viable short-term solutions for solving South Africa’s energy crisis with domestic gas. Most research reports in the public domain regarding the future role of domestic gas in South Africa are not produced by oil and gas exploration companies. Many of these so-called research reports about domestic gas are frankly quite misleading because they are not supported by detailed exploration and appraisal gas research work. These reports work primarily off limited publicly available information.
Furthermore, would you, if you were an oil and gas exploration company in South Africa provide researchers with your confidential information and IP? If you do, the confidentiality agreement alone would be twenty pages long with lots of conditions regarding publication. Most I believe would not, especially in South Africa, with well-reported corruption and a well-financed anti-fossil fuel lobby.
Several published research reports dealing with South Africa’s domestic gas exploration activities should at least state in their reports whether they have or have not directly consulted with gas exploration companies and if not, that the results of their research reports could be inaccurate or misleading. How many holders of onshore gas rights in South Africa can state that they been properly consulted by research analysts. Most, I am certain, would say they have not been properly consulted.
It is astounding how quickly negative assumptions regarding domestic gas are advanced and placed in the public domain with limited research especially by those who lack gas exploration understanding seeking to oppose or limit RSA domestic gas as a future baseload energy source. The Petroleum Agency SA (PASA), as regulator and designated agency, understands that it must also be cautious with gas estimates to maintain credibility while also being subject to confidentiality restrictions.
Without overstating the point, who has heard of D3 Energy?, D3 Energy through an RSA subsidiary has onshore exploration gas rights in South Africa. They have recently released their prospectus for an ASX IPO. Their prospectus contains a competent persons’ report confirming onshore gas resources. Kinetiko, like D3 Energy and several other gas exploration companies are extremely optimistic regarding onshore gas and have invested significant sums of money in the future of domestic onshore gas.
Good oil and gas exploration companies employ the best and the brightest technical and commercial people. They must because of the risks involved. RSA gas exploration companies know a few things about exploration, production and the market. They know that if you have gas and produce it in RSA you will sell it. They also know that they can sell it as energy (not exclusively for electricity generation) without requiring any state provided infrastructure. They also know the cost to produce gas, locally and the comparative cost of landed imported gas. Without local knowledge and detailed commercial understanding of the previously mentioned, no upstream company will commence with gas exploration in South Africa.
Gas exploration companies know a little more than given credit for, especially if they, their shareholders and investors are still funding RSA gas exploration despite all the risks (political, regulatory and environmental) above the surface.
As Bastion continues to de-risk its onshore gas opportunities through intelligent exploration, we look forward to partnering with like-minded companies, development finance institutions and industry as joint venture partners, financiers, contractors and gas off-takers who like us consider this a worthwhile endeavour.
For more information please contact the undersigned at barrisford@bastionoil.com or info@bulwarkoil.co.za
Barrisford Petersen
Founder and Managing Director
Bastion Oil and Gas South Africa (Pty) Ltd
Bulwark Oil And Gas SA (Pty) Ltd
Rockit Energy (Pty) Ltd
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