Challenger Energy's shale gas exploration application will now be assessed by the South African Republic after being stalled for three years, the company announced.
Unconventional gas exploration company, Challenger Energy announced that the government decided to proceed with the shale gas exploration right application in South Africa's Karoo Basin, according to company's press release.
Challenger Energy is an Australian public company that is presently focused on shale gas in the Karoo Basin in South Africa. Its subsidy, Bundu, applied in 2010 and the application has been on hold since 2011.
The Karoo basin is located in the north of Port Elizabeth city and holds 390 trillion cubic feets (11 trillion cubic meters) of natural gas, according to U.S. Energy Information Administration.
"The application for shale gas exploration rights have been on hold since 2011, so the decision to proceed with the processing of Bundu's application represents a major milestone," stated Challenger.
South Africa had been proceeding cautiously on shale gas extraction. The ministry of mineral resources has placed a moratorium due to environmental concerns and reactions from farmers and landowners in the region, according to research firm, Oxford Business Group.
According to South Africa's official website, President Jacob Zuma stated earlier this year that the value of shale gas in the country would be a game changer for the economy.
The South African Petroleum Agency is authorized to regulate oil and gas exploration activities in the country. According to the Agency's website, Shell International, Falcon Oil and Gas and Chevron has applied for extraction rights in the Karoo basin.
By Nihan Cabbaroglu