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Petroleum Industry in South Africa

Petroleum Industry in South Africa

The petroleum industry in South Africa is a large employer and an important part of the country’s economy. As one of the leading producers of natural gas, oil, and coal in Africa, South Africa has clear advantages as a potential market for petroleum products. The country’s excellent geologic conditions, its well-developed transportation infrastructure, and its stable political climate provide further opportunities for growth. In fact, the mining services sector directly contributed almost 3% to GDP at market prices in 2016. Employment stands at about 300 000 people across all subsectors combined (mining services; mining support services; construction services; utilities services; information and communication technology services). The role of the oil and gas industry extends beyond just production of end products. For example, service providers are also essential to the petrochemical manufacturing process because they help complete various stages from pre-drilling to post-production activities.

Oil and Gas Exploration

Exploration is defined as looking for petroleum deposits. It is a stage before the production phase in which geologists use seismic surveys and core samples to identify potential oil and gas deposits. The exploration process can be expensive, so only a small percentage of wells result in an actual discovery. Exploration results are used to determine the size and location of future drilling sites.

Oil Production

The process of producing crude oil is known as “oil production.” Crude oil is the unrefined form of petroleum that contains a mixture of hydrocarbons. The composition of crude oil varies from region to region based on the geological formation where it was formed. Crude oil is extracted from the ground through drilling and pumping. Because the crude oil has a low boiling point, it must be kept warm during transportation and refining.

Drilling and Occurrence of Gas

The occurrence of natural gas during drilling for oil is called a “gas leak.” When this happens, the well is immediately stopped and the gas is flared off or otherwise disposed of. No attempt is made to collect the gas because it is considered a by-product of oil production. However, a well can also be drilled with the intention of extracting only gas.

Natural Gas Usage in South Africa

South Africa’s natural gas consumption amounts to 16% of the total consumption of all fuels. The three main uses of natural gas in South Africa are electricity generation (37%), industrial use (26%), and residential/commercial use (24%). The petroleum industry has several important roles in South Africa, including providing a steady supply of energy, generating significant economic activity, and providing jobs for thousands of people. In addition, oil and gas exploration activities lead to the discovery of other minerals, such as uranium, that may be useful for other industries.

Conclusion

South Africa has many advantages as a potential market for petroleum products. The country has excellent geologic conditions for the extraction of oil, a well-developed transportation infrastructure, and a stable political climate. The petroleum industry has several important roles in South Africa, providing a steady supply of energy, generating significant economic activity, and providing jobs for thousands of people.


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