DESPITE it being billed an economic and energy game changer for South Africa, the World Wildlife Fund (WWF) for nature believes that fracking, at this time, is not commercially viable.
A report by the fund released this week listed why shale gas exploration had various geological, technological and pricing hurdles to overcome in South Africa.
The report – titled “Framework to assess the economic reality of shale gas in South Africa” – questioned oil and gas companies’ claims that vast amounts of money could be made with fracking in the Karoo.
Placed at the highest level on the country’s national agenda, President Jacob Zuma last week once again included gas as part of the long-term energy master plan in his state of the nation speech.
“South Africa is surrounded by gas-rich countries, while we have discovered shale gas deposits in our own Karoo region,” Zuma said, without elaborating in more detail on what he previously termed a “game changer for the country”.
The WWF technical report found that the profitability of the gas industry was not only influenced by development and construction costs, but also by the fiscal and tax regime in the country.
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