Sasol puts shale gas exploration on hold

South African petrochemical giant Sasol is shelving exploration plans for shale gas in the Karoo, at least for now, the company said Thursday. The government has in any case imposed a moratorium on exploration in the semi-desert Karoo until February 2012, amid fierce opposition from environmental groups over the use of hydraulic fracturing drilling to release underground resources. "We recently concluded an extensive technical study for shale gas in the Karoo Basin in South Africa," Sasol's chief financial officer Christine Ramon said in a statement. "The technical cooperation permit which allowed us to do this expired on November 17, 2011 and we have decided not to pursue further exploration activities in the area at this stage," she said. "Sasol will, however, continue to monitor the South African shale gas landscape for new developments." Shale gas extraction -- developed in the United States and Canada -- uses a combination of water, sand and chemicals to blast into hard rock to release gas locked inside. South Africa is also interested in the technology, known as fracking, which could help the coal-dependent nation reduce its carbon emissions while developing new domestic energy sources. But environmental groups and residents in the Karoo fear the process could pollute scarce water supplies and upset the region's delicate ecological balance. Anglo Dutch energy giant Shell has expressed interest in a $200-million exploration programme, and indicated that developing the reserves could generate billions of dollars of investment in a country desperate for jobs.