Sheila McNulty Shell’s South Africa move highlights gas potential

Even as ExxonMobil was applauded this past week for finally plunking some real money down in the US natural gas scene, Royal Dutch Shell, which has long been in on the US gas play, made another move – this time into South Africa.

The South African Petroleum Authorities awarded Shell a Technical Cooperation Permit for a one-year study to determine the hydrocarbon potential in parts of the Karoo Basin in central South Africa. Shell will have the exclusive right to apply for exploration permits following completion of the study. This is being billed by Shell as a potential natural gas deal.

This is not the first time a major has looked further afield for natural gas reserves. And it will not be the last. The significance of it, however, is that even though world governments have yet to note the massive potential of natural gas in the years ahead, the industry is moving to capitalise on it. It may still be a fossil fuel, but it is the cleanest one.

And it is a business the majors know how to exploit. They can scale it up to replace dirtier oil and coal and make an immediate impact on carbon emissions.

Once the world leaders decide to take real action on climate change, natural gas will be part of the framework. And the majors will be positioned to cash in on the play. Too bad those at Copenhagen were too caught up in the nitty gritty to see the big picture and move forward.