Effects of Discovery of Natural Gas in South Africa

Running head: ECONOMICS
Economics
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ECONOMICS
Effects of discovery of natural gas in South Africa
Introduction
The natural gas acts as a natural bridge fuel between the fossil fuel of the present
situation and the renewable fossil fuel of tomorrow. Natural gas is known to provide
environmental benefit for the country. According to the reports of the French energy giant it
have been found out that there is a presence of large gas field in the coast of South Africa
which is termed as the “wet gas”.
Beneficial of natural gas found in South Africa
The natural gas which have been found in South Africa can be used as petrol at
PetroSA’s gas to the fuel refinery. The gas can either be converted to petrol or electricity.
Government will be also be earning more tax from the natural gas since oil is known to
represent more than fifteen percent of the imports of South Africa1. The reason behind this is
that drilling for oil is known to be highly capital intensive in nature. For investing in this
particular kind of industry, investors need certainty in legislation as well as in government
policy. It have been found out that more than 300 offshore wells have been drilled in South
Africa over the past years. In addition to that the oil companies will have to pay a royalty of
percent on the sales of all oil or gas produced in South Africa. The gross domestic product of
South Africa will also increase after the discovery of the natural gas.
The discovery of the natural gas in South Africa will lead to a huge boost to all kinds
of business in South Africa. Welders and electricians will also be in demand when they will
be producing both on the rigs as well as in onshore. Engineers who are experienced as well as
1 "Everything You Need To Know About South Africa's Massive Gas Find." Businessinsider.co.za. N.p., 2019.
Web. 10 Mar. 2019.