New player on fracking scene
September 11 2013 at 09:05am
By Tony Carnie
The largest exploration area is in the Ladysmith/Bergville area, below the water-rich Drakensberg.
Durban – A relatively unknown group of Gauteng entrepreneurs could be the main beneficiaries of plans to “frack” shale gas in KwaZulu-Natal.
Sungu Sungu, an empowerment group largely based in Joburg and Pretoria, has been awarded three preliminary “exploration” permits covering chunks of the central and northern parts of the province.
The largest exploration area is in the Ladysmith/Bergville area, below the water-rich Drakensberg, with a second block in the coal belt south of Newcastle.
The third Sungu Sungu permit covers the remote northern border with Mozambique, including the eastern section of the Tembe Elephant Park, home to some of Africa’s largest tuskers.
No final decision has been announced yet, but Water Affairs Minister Edna Molewa has added further cement to previous government signals that fracking will go ahead – despite widespread concerns in many parts of the world about the human health and environmental risks of injecting a high-pressure cocktail of chemicals, water and sand deep into the earth to fracture rock to extract natural fuel gas.
Last year the government lifted the moratorium on further fracking exploration permits, and the latest decision, to tighten up water regulations, suggests the all-clear will be given early next year.
This would open the way for Sungu Sungu, Shell and other players to begin formal exploration work in six provinces.
While Shell and other exploration groups have established, and often tarnished, records in the oil and gas business, Sungu Sungu is a new, mystery player.
Information on the group’s website was set up 15 years ago, but there is little detail about its ownership and corporate profile.
Joburg-based managing director Thabang Khomo, 45, told The Mercury that he remained the main shareholder, in partnership with geophysicist Solomon Lephoto, a former employee of the state oil company, PetroSA.
Company searches reveal that Sungu Sungu has numerous offshoots with a variety of directors.
These include Sungu Sungu Gas (registered in 2009), Ilima Sungu Sungu Resources Consortium Company, Sungu Sungu Mining, Sungu Sungu Petroleum, Sungu Sungu Resources, Sungu Sungu Namibia, Sungu Sungu Iron Ore and Sungu Sungu Projects.
Sylvia Nontombi Matshoba is a colourful character who was previously associated, indirectly, to Sungu Sungu. She has also been linked to disgraced former police commissioner Jackie Selebi.
Matshoba worked at the ANC head office in the 1990s as Selebi’s secretary in the party’s social welfare and development section.
However, it appears that Matshoba is no longer linked to Sungu Sungu. Her only, indirect, connection was through her directorship of Batlalepula Resources which she joined in January 2006. Records show she has resigned.
The only two other directors of Batlalepula are Thabang Khomo and geologist Sipho Velempini, who are joint directors of three other Sungu Sungu companies.
Khomo said Batlalepula become dormant about six years ago and Matshoba had also left that company.
Other directors of Sungu Sungu companies include Daphne Vuba, Nomadlozi Mashinini, Simisani Khupe and Lucky Mabanga.
Khomo said Sungu Sungu had been awarded three PetroSA technical co-operation permits for oil and gas in the KZN region, but these had not been exercised because of the fracking moratorium announced last year.
These permits did not allow exploratory drilling, just desktop geophysical studies and review of previous geological data from the 1970s by the old Soekor petroleum exploration agency.
Khomo said that while the preliminary exploration in KZN covered a large area, Sungu Sungu was unlikely to mine more than 5 to 10 percent of the total area, if viable gas reserves were found.
Asked whether Sungu Sungu had the funds for extensive exploration, Khomo said the preliminary desktop phase was not as capital intensive as drilling and exploration.
On whether the group was considering future partnerships with oil companies, Khomo said: “Not yet. At this stage the technical studies might cost R1-million to R2m. After that you may have to get some of the majors involved, or get experts from the US or Canada.”
Sungu Sungu is already busy in KZN exploring and drilling in the Melmoth area for iron ore deposits, in partnership with the Indian company Jindal Steel and Power. – The Mercury