Shell: Fracking may not make us money

2014-03-12 12:21

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Cape Town – Multinational Royal Dutch Shell states that fracking in the Karoo for shale gas may not be financially viable.

According to IOL Shell’s upstream manager Niall Kramer, in a discussion on fracking told media outlets that only once shell had finished its exploration duties would they be able to tell if fracking is financially sound.

Kramer argues that gas is not a done deal. Exploration will provide some insight as to how much shale gas is present in the Karoo and how much of the gas will provide a financial return.

The quantity of shale gas present in the Karoo has been under a large amount of contention. A US report done a few years ago suggested that there was 485 trillion cubic feet (tcf) of shale gas present in the Karoo.

This amount was later changed to 370tcf. Pasa (Petroleum Agency of South Africa) now suggests that in the Karoo there is only 40tcf of shale gas.

Kramer argues that no one really knows how much gas is present.

It is perhaps because of this reason that shell would like to explore the possibility of fracking in the Karoo by placing around 24 exploration wells.

If there is evidence that shows it will be financially feasible Shell will then apply for a licence with government to frack.

A study that was done for shell suggests that there is 20tcf of shale gas in the Karoo and this would translate into R80bn and 300 000 jobs.

40tcf of shale gas would mean R200bn for the country and 700 000 jobs according to IOL.
Read more on:    shell  |  karoo  |  cape town  |  fracking
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