What’s on the table for oil-rich South Africa as they set their sights on the South African oilfields
The South African government has set out its plans for the development of the country’s oilfields, but there are concerns over how the country can afford to fund the projects in the short term.
The country is facing a $1.8 billion shortfall in the oil market this year, the worst in years and its only way of coping is by increasing imports of oil.
“We have a lot of money sitting in the bank, but we’re not going to be able to spend it,” Finance Minister Sibwe Monyela told Reuters news agency on Friday.
Oil and gas companies have a history of financing the expansion of their projects.
In 2011, oil giant Shell agreed to pay $500 million for the rights to develop a natural gas field in the province of Limpopo and the same year, Exxon Mobil agreed to contribute $3 billion to the $1 billion development of a gas field that would eventually become the world’s largest.
More than 100 oil projects have been approved since then, including the $2.7 billion project to develop an offshore oil field in Mozambique.
This year, South Africa is hoping to be more efficient with its oil investments by expanding its dependence on imports of crude oil and refining.
South Africa is the only country in Africa where oil is extracted in a traditional process and only imports it via pipelines, which are used to move the crude oil to market.