Unconventional gas explorer Challenger Energy expects to hear by the third or second quarter of this year whether its subsidiary, Bundu Gas and Oil Exploration, will be allowed to explore for shale gas in South Africa’s Karoo basin.
The ASX-listed company confirmed on Monday that Bundu had lodged an updated environmental management programme (EMP) with the Petroleum Agency South Africa (Pasa) on February 27. This followed a process that included a further round of public consultation in respect of its application for a shale gas exploration right, which it had applied for in 2010.
Challenger MD Robert Willes said in a statement that South Africa’s Mineral Resources Minister, Advocate Ngoako Ramatlhodi, had 120 days to consider whether to approve Bundu’s EMP.
“Challenger anticipates that a decision may be taken on Bundu’s exploration right application in the second or third quarter of 2015.”
The company also drew attention to the announcement in South African Finance Minister Nhlanhla Nene’s 2015 Budget speech last week that R108-million would be allocated to “research and regulatory requirements for licensing shale gas exploration and hydraulic fracturing”. Challenger believed that the statement reinforced government’s commitment to moving forward with shale gas exploration.
Bundu was one of three companies to apply for exploration rights ahead of the institution of a moratorium on shale-gas exploration and development activities – the other companies are Shell, which made applications over three areas, and Falcon Oil and Gas. In October 2014, Pasa notified the applicants that it would proceed with the processing of applications received prior to February 1, 2011, while maintaining the moratorium on new applications.