Falcon Oil CEO Expects South Africa Shale Permit in Second Half
After unsuccessfully trying to have a response published by BLOOMBERG, TKAG posts it’s views on Falcon CEO’s SA wish list.
Here is the article by Bloomberg: TKAG response below.
Falcon Oil & Gas Ltd. expects to be awarded a permit to start exploration at its shale plot in the Karoo basin in South Africa in the second half of the year after technical regulations are published.
“Our focus will be South Africa over the next 12 months,” Chief Executive Officer Philip O’Quigley said in an interview. The Dublin-based company, which signed a five-year exclusive co-operation agreement with Chevron Corp. in 2012, may sell a stake in the asset following the approval.
The Karoo basin in the southern part of the country may have 390 trillion cubic feet of technically recoverable gas, making it the world’s eighth-biggest shale-gas deposit, according to the U.S. EnergyInformation Administration. Falcon holds 7.5 million acres, according to a company presentation.
“The development of an upstream oil and gas industry will be a focus during the next five years,” Mineral Resources Minister Ngoako Ramatlhodi told a lawmakers committee in Cape Town on July 8. “We want to unlock investment as quickly as possible.”
South Africa has published draft regulations for the shale gas industry, which require drillers to meet American Petroleum Institute standards governing the type of equipment used and the disclosure of chemicals. Final rules are due to be issued in the next few months.
Earlier in the year, parliament approved separate legislation which will grant the government the right to take a 20 percent free stake in all new oil and gas projects and acquire a further unspecified share at an agreed price. President Jacob Zuma was asked to hold off on signing the law pending a review by a ministerial committee that will aim to ensure the law doesn’t discourage investment, Ramatlhodi said.
“We are delighted the government wants oil and shale gas exploration to start as soon as possible,” O’Quigley said.
To contact the editors responsible for this story: Will Kennedy at email@example.com Alex Devine, Indranil Ghosh
An open letter to Mr. Philip O’Quigley –
Chief Executive Officer of Falcon Oil and Gas Ltd.
July 14 2014
Dear Mr. O’Quigley,
I have read in the press (Bloomberg July 11 2014) of your company’s anticipation that it will receive a permit from the South African government to commence exploration in the unique and sensitive Karoo basin ‘in the second half of the year’ and following the publishing of technical regulations.
TKAG has communicated with your venture partner, Chevron Corporation with regard to its involvement in this Karoo acreage, and in August of 2013 suggested that Chevron may wish to invest some time in reviewing the Environmental Management Plan (EMP) submitted by Falcon in 2011 to the Petroleum Agency of Southern Africa. TKAG and our alliance partners remain shocked and dismayed at the cavalier attitude displayed by Falcon and Chevron to the introduction of shale gas mining into a uniquely sensitive area in a water-scarce country and under the spectre of a plethora of unresolved issues standing between your company and a permit to commence exploration and possibly full production via fracking in South Africa.
Mr. O’Quigley, it is my obligation and duty to inform you that the issue of a permit to your company to commence exploration in South Africa for shale gas may be somewhat further away than you have publicly anticipated. I might add too that even should you have the permit to hand in the next five months, it may be far longer than that, before your company starts breaking ground in the Karoo, if ever. In essence, just because Falcon, Chevron et al are fracking elsewhere in the world doesn’t mean that you will succeed in bringing shale mining here.
TKAG and its alliance partners are not opposed to responsible and sustainable development of natural resources for the present and future benefit of South Africans. We will not submit to the imposition of a technology such as this under the current circumstances in South Africa – circumstances of which Falcon and Chevron are fully aware and which will militate against the commencement of this process in South Africa.
We invite you to send a representative to a press conference in Sandton, Johannesburg on July 22nd at which TKAG and its alliance partner, AfriForum will reveal a significant development in the shale gas debate in South Africa.