Ben van Beurden : Shell CEO

South Africa was nudged Wednesday by Royal Dutch Shell to hasten decision on its application, now nearly four years old, to explore for shale gas in the Karoo, a pristine semi-desert that may contain some of the world’s largest reserves.

According to a Reuters news report, Shell’s application in early 2011 for an exploration licence in the Karoo, which the U.S. Energy Information Administration says may hold up to 390 trillion cubic feet (tcf) of technically recoverable reserves, caused an uproar from farmers and green groups, and an 18-month moratorium on the issuing of permits.

A year ago, several ministers — including then-mining minister Susan Shabangu — suggested hydraulic fracturing, or fracking, exploration licences were about to be issued but none has been forthcoming.

The Karoo region where Shell wants to prospect for Shale oil

The mining ministry has failed to clarify reasons for the delay, either to Reuters or Shell.

“Why it is taking so long is a conundrum that we are trying to figure out,” Shell South Africa chairman Bonang Mohale told a news conference. “We were hoping that by now we would have at least started the exploration process.”

With energy firms chasing large natural gas finds in places such as Mozambique, Brazil and China, South Africa could ill-afford to carry on delaying much longer, he added.

“Capital is moving,” he said. “My guess is that we are probably months away, not years away, from the issuing of exploration rights.”

The U.S. estimates give South Africa the world’s eighth-biggest shale reserves, with nearly two thirds the deposits estimated in the United States.

Shell says it is committed to investing $200 million in gas exploration in the area, which lies at the underdeveloped heart of Africa’s most advanced economy.

A Shell-commissioned study by Cape Town-based consultancy Econometrix suggests extracting 50 tcf of gas would add $20 billion, or 0.5 percent of GDP, annually for 25 years to an economy that has always been a major energy importer. The study also suggests it would create 700,000 jobs, a major draw for a government trying and failing to come up with answers to persistent 25 percent unemployment.

On its website, Shell South Africa says South Africa has a great opportunity to secure a more sustainable energy future, reducing its
dependence on coal by using more environmentally friendly options available in this country, such as natural gas.

“A plentiful supply of natural gas – the cleanest of all fossil fuels – may exist in parts of the shale rock formations deep beneath the surface of the Karoo Basin. If found in commercially viable quantities, this gas could help secure South Africa’s energy future, but only if we can preserve the unique character of the area as well. We believe that the environmentally sensitive Karoo can be protected even if it becomes a national energy resource. Shell believes that shale gas exploration and production must only occur in a socially and environmentally responsible manner, and in harmony with the environment.