/ 30 July 2010

Masetlha firm steps on the gas

Masetlha Firm Steps On The Gas

Farmers are up in arms about plans by a previously unknown gas exploration company, of which former intelligence boss Billy Masetlha is a director and shareholder, to mine methane gas in the environmentally sensitive southern Cape near Mossel Bay.

In May this year the company, Advasol, won the right to prospect for new gas fields on farms in the Overberg.

Advasol will receive the necessary exploration rights for nine sites only once its environmental management plans have been finalised. The sites, including farms and offshore land near Stilbaai, De Hoop, Infanta and Struisbaai, cover an area of more than 300 000ha.

Included are conservancies showcasing the unique Cape floral kingdom. At this stage exploration will cover only 5 000ha. Advasol is currently relying on satellite images to detect possible gas fields.

At well-attended public meetings this week, Advasol and its environmental consultant, Golder Associates Africa, said it was impossible to predict the impact of drilling until it was known whether there were gas reserves.

Farmers, environmentalists and heritage experts have warned of disastrous environmental impacts if drilling, even for exploration, is allowed.

Green lobbyists, including the Wildlife and Environment Society of South Africa, worry about the potential effect on marine life, including along the region’s world-famous whale route. They are also worried about the significant biodiversity of the area and renowned archaeological sites in the Blombos conservancy.

“We are extremely concerned about the impact of Advasol’s plans in the area,” said Johann Graaf, a member of the Blombos conservancy.

The local municipality, the Hessequa council, also opposes the drilling, releasing a strongly worded statement questioning the gas drilling’s impact on the local economy, particularly agriculture.

Earlier this month a row erupted when landowners accused Advasol employees of trespassing on their land illegally to conduct studies for the exploration. The company said it had verbal approval from all the landowners except two.

The Petroleum Agency of South Africa is investigating the allegations.

In papers submitted by Golder, Advasol said it would ensure that boreholes for exploration would not be sunk in protected areas and that underground water reservoirs and heritage sites would be closely monitored. Golder said the environmental impact would be kept to a minimum in the initial gas exploration phase. Advasol would not build huge ­extraction platforms in the ocean, but would rather pipe the gas back to the mainland.

Concerns also centre on the potential use of “fracking” — the fracturing of rocks to stimulate oil and gas wells — in drilling for gas.

The controversial technique is under scrutiny by the Environmental Protection Agency in the US and could be banned. It has a history of contaminating groundwater, which could be disastrous for the water-stressed southern Cape.

Advasol has no drilling experience. Its chief executive, Anton van Zyl, said it had become involved in gas exploration for environmental reasons.

“Like other countries, South Africa has to lessen its carbon footprint,” Van Zyl said. “The discovery of significant gas fields could contribute to the country burning less CO2.”

Van Wyk said Advasol became interested in the southern Cape site when it studied satellite images that highlighted greenhouse emissions there, indicating that there might be gas fields below.

During the apartheid era Soekor prospected in the same area, but found nothing economically viable. However, Van Wyk believes the new satellite research shows promise.

“We did initial feasibility studies and we’re encouraged,” he said.

He confirmed that Masetlha is a non-executive director of Advasol and, with the Mamphore Trust, the company’s black empowerment partner. The majority shareholder is Crystal Exploration, of which Van Wyk is a director. Advasol is apparently a subsidiary of Pretoria-based investment company Ice Finance.

As there is no known gas drilling expertise in South Africa, Advasol would have to seek overseas help. Van Wyk said the company was talking to an American concern about a partnership. He admitted that Advasol might use fracking if gas was discovered, but said it was too early to think about its environmental impact. “It all depends on the formations,” he said.

As more information about what lay beneath the surface became available, the company could devise an environmental plan and work out how to mitigate the effects of drilling, he said. Masetlha was abroad and did not want to comment.