Category:

South African waters drawing in energy companies

European energy companies among those showing interest in basins in southern African waters. Statoil and Eni add Mozambique acreage to their portfolios. Photo by James Jones Jr./UPI STAVANGER, Norway, Oct. 30 (UPI) — Southern African waters drew more interest from energy explorers with Norway’s Statoil and Italy’s Eni wading into Mozambique waters. Statoil and Eni were among those winning bids to explore for potential reserves in the waters off the coast of Mozambique, where depths range from 650 feet to 5,900 feet. Nick Maden, a regional exploration director for Statoil, said Mozambique waters are among the more promising frontier basins in the area , where the oil potential is said to be "significant." "The position strengthens and develops our global exploration portfolio," he said in statement. Eni last year said it discovered natural gas in a well in an area off the Mozambique coast thought to hold 85 trillion […]

Posted On : Published By : Tom Whipple
Category:

Chevron Sees Additional South African Oil Refinery Causing Glut

South Africa doesn’t need another oil refinery because the slowing economy has curbed demand and the country has ample gasoline production, said Shash Rabbipal, the new chairman at the local unit of Chevron Corp., the second-largest U.S. energy company. “Should another refinery be built, it would mean that the country would have to increase its exports of products and this would mean a change from the current practice of ensuring that supply catered mainly for local demand,” Rabbipal, 47, said Friday in an interview in Cape Town. He has worked for Chevron for 25 years and was appointed to the post last week. The six South African refineries, including San Ramon, California-based Chevron’s Cape Town facility, process a combined 703,000 barrels of crude a day, exceeding demand, according to Rabbipal. State-owned PetroSA Ltd. proposes a new plant on the south coast that would be the biggest on the continent […]

Posted On : Published By : Tom Whipple
Category:

Power Outages Dim South Africa’s Prospects

SOWETO, South Africa—Residents of this sprawling township famous for its resistance to white-minority rule are fighting a battle they thought consigned to history: keeping the lights on. National power company Eskom Holdings Ltd. is reeling from years of underinvestment and poor management, surrendering to power outages that frequently plunge Soweto’s 1.3 million residents into darkness. Nonayona Mkeshana and her neighbors have resorted to cooking over open fires and singing and dancing in the street now that television sets have gone dark. “We’ve had to get used to it, to survive,” said Ms. Mkeshana, a 59-year-old grandmother who lives with her son and his children. South Africa’s Treasury on Wednesday said it sold its stake in mobile company Vodacom Group Ltd. VOD -1.87 % to raise $2 billion to keep Eskom solvent. Chief Executive Brian Molefe said blackouts could continue for months as Eskom catches up on years of neglected […]

Posted On : Published By : Tom Whipple
Category:

Power Outages Mar South Africa’s Economic Expansion

ENLARGE DRDGOLD sends 60,000 tons of sludge through its machinery every day to extract traces of gold at its processing plant in Brakpan, South Africa. Photo: Waldo Swiegers/Bloomberg News BRAKPAN, South Africa—It takes a lot of power to extract traces of gold from the 60,000 tons of sludge DRDGOLD Ltd. DRD -4.05 % sends through its machinery here each day. That is something that the Johannesburg-based company hasn’t been able to count on recently. “It’s a worrying thing that you’ve got to watch all the time,” said Niël Pretorius, DRDGOLD’s chief executive. South Africa used to be one of the few countries on the continent where most people had reliable access to electricity. But a lack of maintenance and investment has pushed state-run power provider Eskom Holdings Ltd. into a daily crisis as it struggles to meet demand. Blackouts are threatening to drive Africa’s second-largest economy off a cliff, […]

Posted On : Published By : Tom Whipple
Category:

Sasol Cuts 1,500 Jobs as Oil Price Slumps

ENLARGE South African petrochemicals company Sasol Ltd. has cut 1,500 jobs and said more will go, the latest layoffs in a global oil sector contending with the commodity’s price rout. Head count at the company will be “dramatically down” by June, with Sasol pressing ahead with steep cuts in capital spending and a reduction in its annual dividend, Chief Executive David Constable said. But Mr. Constable said the scale of the industry’s cutbacks are such that they might catapult oil prices higher again in 2017 after their roughly 50% slide since last summer. “The capital projects that we’re cutting back on—that the majors are cutting back on—these projects take years and years to start back up. You don’t flip the switch,” he said in an interview. “That’s what could give you a high-side well above 100 [dollars a barrel],” he said. Sasol itself has “put on the shelf…until further […]

Posted On : Published By : Tom Whipple
Category:

Zuma Seeks Nuclear Power to Solve South Africa’s Energy Crisis

(Bloomberg) — South African President Jacob Zuma said his priority is to solve the energy crisis in the country that’s curbing output at mines and factories and stifling economic growth, including adding more nuclear power by 2023. “We will pursue gas, petroleum, nuclear, hydropower and other sources as part of the energy mix,” Zuma, 72, said in his annual state-of-the-nation speech in Parliament in Cape Town on Thursday. “The country is currently experiencing serious energy constraints which are an impediment to economic growth and is a major inconvenience to everyone in the country.” Zuma’s speech follows nine consecutive days of rolling blackouts implemented as demand for power outstripped supply. State utility Eskom Holdings SOC Ltd., which provides 95 percent of the nation’s electricity, has warned of almost-daily blackouts until the end of April. The power crisis has soured investor appetite for South Africa’s currency and debt. The rand reached […]

Posted On : Published By : Tom Whipple
Category:

Scrapped: Oil Prices Shelve an $11 Billion Gulf Coast Project

A rendering for one of Sasol’s projects near Lake Charles, La. ENLARGE Photo: C.H. Fenstermaker & Associates, LLC South African energy giant Sasol Ltd. said Wednesday it was shelving an $11 billion project on Louisiana’s Gulf Coast, imperiling one of the largest foreign investments on U.S. soil because of the plunge in oil prices. Sasol has spent years planning to expand its chemical factory outside Lake Charles, La., into a sprawling facility to turn natural gas into industrial compounds and diesel fuel. In October, the company committed $8 billion for equipment that produces ethylene, which is used to make plastics and other products. That plant is still going forward, but Sasol said on Wednesday that a bigger project, to use natural gas rather than crude to make diesel, is on hold. Plummeting oil prices have forced it to push back its own 2016 deadline for deciding whether to build […]

Posted On : Published By : Tom Whipple
Category:

Blackouts Present Biggest Risk to South Africa’s Economy

South Africa has an electric bill coming due that’s threatening everything from its swimming pools to its sovereign debt. Consumers are asked almost daily to switch off their water heaters, pool pumps and anything else that will save power during peak periods. Industrial customers are also asked to conserve energy, even if it means reducing production. And when that’s not enough, Eskom Holdings SOC Ltd. orders managed blackouts. The state-owned utility can’t provide reliable electricity to run Africa’s second-largest economy. It has a long-term plan to expand generating capacity by more than 40 percent, while facing a 225 billion-rand ($20 billion) funding shortfall through 2018. The company has faced supply shortages for years and has said it may be another five years before it can guarantee the lights will always be on. “Eskom is in dire straits,” said Anne Fruhauf, southern Africa analyst at New York-based risk adviser Teneo […]

Posted On : Published By : Tom Whipple
Category:

Fracking Opponents Renew Call for South African Shale-Gas Halt

A South African environmental group renewed its call for a moratorium on shale-gas fracking, as the government moves closer to a decision on whether to allow the process opponents say imperils water quality. The Treasure Karoo Action Group, named after the semi-desert area of South Africa that has attracted petroleum exploration companies, started in Johannesburg today the latest phase of a campaign to block the drilling technique. An April 2011 moratorium placed on shale-gas exploration in South Africa ended in September 2012. The government on Oct. 16 published proposed regulations for hydraulic fracturing as it seeks to tap as much as 390 trillion cubic feet of resources in the Karoo. Opponents of fracking, which blasts water, chemicals and sand into rock to release natural gas, say it risks contaminating ground water. Royal Dutch Shell Plc (RDSA) is among explorers to have applied for permits to explore the Karoo. South […]

Posted On : Published By : Tom Whipple