The Editor’s Desk: The Total gas strike will change SA forever

DUBLIN — In a week dominated by Cyril Ramaphosa's State of the Nation Address (SONA), another explosive piece of news hit the headlines: Total have struck a major oil and gas deposit off the Southern Cape. As a net oil importer, South Africa has long sought its own oil and gas deposits, but after the fracking debacle in the Karoo, it looked like a hopeless cause. The Total discovery changes all that. With a billion barrels of oil equivalent, the deposit could transform SA's energy future – especially if it encourages more exploration and development. Alec Hogg and I discuss the implications of this discovery and what it means for SA's future. We also dive deep into the strange story of Jeff Bezos' compromising selfies. Bezos broke the internet this week with a blog post detailing what appears to be an extortion attempt by Trump cronies at the National Enquirer, who threatened to embarrass the billionaire if he doesn't retract accusations of politically motivated meddling by the tabloid. Suffice it to say Bezos decided that the best defence is a good offence, with explosive results. Alec and I muse on the wisdom of trying to blackmail the world's richest man. – Felicity Duncan.Hello, and welcome to this week's episode of The Editor's Desk. I'm Felicity Duncan and with me, as always, Alec Hogg. Well, Alec, there is only piece of news, as far as we're concerned this week, and that is the very exciting Total gas strike. Now, this is a big company. This is a serious company and that makes this big and serious news. Give us a little bit of background and tell us what you think this could mean for SA?.___STEADY_PAYWALL___.Felicity, it is the biggest story but of course, its been overshadowed by the State of the Nation and the arrests, and we can touch on that in a moment but just for context. The late Tony Twine an economist at Econometrics did an analysis of shale gas in the Karoo and he came to the conclusion that that was a game changer. Now, SA has, depending on which survey you look, but either the fourth or the eighth biggest shale gas reserves on earth. But they're sitting in the Karoo and because there're environmental reasons and policy uncertainty, nothing has gone ahead. .In fact, Shell, at one point in time had already committed to spend $25m on exploration and that was on hold. Total's strike, just off the Southern Cape coast was part of that. Now, this all happened in around 2014, when we had problems in SA about the Mineral and Petroleum Resources Development Act (MPRDA), where Zuma and his cohorts were trying to squeeze out excessive amounts of money for themselves in any mineral rights, applications, or allocations that were made. Total and the Southern Cape coast, and Shell in shale gas both said 'we're out of here – we're not interested in operating in a geography where you have such deep levels of corruption.' .Total said this week, after the strike, and I'll get into that in a moment, that the reason why they pulled out in 2014 was because they couldn't work in the Outeniqua Basin. Now, if you can imagine, if you take a line from Port Elizabeth all the way down to say, Cape Infanta on the coast so, 350 – 400km. There is a basin there, which is called the Southern Outeniqua Basin. It's about 150kms off the Cape coast. That is very similar in geography to a similar basin in South America, and you go back millions of years, when the Continents split, SA was actually tied to South America but the geography over there has had a lot of gas strikes. So, they always knew that there was gas there and the old apartheid government used to try its best to find oil and gas off the Southern Cape coast, and in fact, that's why moss gas was created and they did have one gas strike at a point in time but moss gas running out of feedstock and it was very important then to find new feedstock for it..So, back to the Southern Outeniqua Basin, 150kms off the Southern Cape coast – very rough waters, very difficult to explore, and Total, in 2014 said, no, it was too difficult for them, and then they stopped. In fact, they also said, that part of the reason was because of the policy uncertainty. They began again in December, and now, this is critical, and they've already struck a well, a billion barrels of oil equivalent, when is substantial. The last time there was announcement of something was when BP got a billion-barrel strike in the Mexican Gulf and that was big news around the world..So, what Total did this week, or its announcement this week, is extremely significant. It will take care of all of SA's oil imports for the next four-years, which has a massive impact, as you can imagine, on the balance of payments and also, on the country's ability to stimulate its economy. But that's only a very small part of the story because the other part is that they have five of these prospects, so they've got another four similar prospects through their 3D seismic pictures and through all the other kind of electromagnetic research that's been done – they've got these five highly perspective areas, in the Southern Outeniqua Basin, in the block that they are prospecting in. .It's almost like the old goldrush days in the Witt' basin. Where you know that this is a consistent reef that goes through, the old main reef, and you know that there will be outcrops in certain areas, and you've already identified but you didn't have the tools to be able to put it to surface just yet. It's a similar thing here so, the first one is now being brought out. They've confirmed it's there. They've confirmed they've hit it and they will taking the rig, which has been especially put together, used on what, the similar type of rigs that they were using off the Shetland Islands, which is also, similarly rough waters. .If you can see, it's almost like the technology is now available to go into the area where in the past, the technology wasn't. The sea was too rough and they've made the first strike. They've confirmed it. A billion barrels of oil equivalent. They can now go to the second area, which is just as perspective as the first and there are five of these. So, if you add that all together, you're talking about the equivalent of potentially, 20 years of SA's oil imports. What that does is it triggers an oil and gas industry because it's a huge strike, just in the one area of the Southern Ortanique Basin in this one block – I think they call it Block 11A. .Now, once you get an oil and gas industry there then you start looking at other things, such as the Karoo, where you've got shale gas which, as we know, has transformed the American economy and the American energy equation by, and you've got all of that technology then that can be applied into the Karoo, to bringing out the shale gas and the eighth biggest, to be conservative, reserves in the world. Plus, you've got the rest of the Ortanique Basin where other prospectors can start hitting oil. .It's just massive news and it is something that SA has been attempting for decades. The old apartheid government was doing its best to find oil. They found plenty of gas and of course, today gas can be, through technology can be turned into the equivalent of oil through freezing but they couldn't get any oil in the Karoo. So, we've got a very good understanding of the gas that exists there. They were trying, off the Southern Cape coast, and they couldn't find any because of the technology, it didn't allow them to operate in these rough deep waters but that's now all in the past..So, if you put that into context and you imagine what a game changer this is for SA economy, which up until this point, has had very little oil and gas, or nothing to talk of, and had to rely on Sasol taking coal and transforming that into fuels. You can just imagine the impact of this and finally, the US from being a massive oil importer is now an exporter. There's no reason why SA doesn't go into the same situation and you then start imagining what that would do to the economy, in the longer term and it becomes a complete game changer for the country..Of course, allied to this is that it is another dividend from the vote that the ANC, 4.700 of them did at the elective conference, where they brought Ramaphosa in, who understands global economy. He understands what investors want. He understands the critical nature of policy certainty and they got rid of somebody who was absolutely and totally ignorant on all of those things. It's a consequence of a lot of things..Yes, that's some very good news, definitely there for the SA economy. ].Now, the only news in America this week, to change gears a little here, is of course the saga, of Amazon's CEO and Jeff Bezos and his fight with the National Enquirer. Now, I want to give a little background here because this is quite a complicated situation. There's a company called American Media, which is a media company that publishes the National Enquirer, and it has a CEO whose name is David Pecker. .Now, this company got into a lot of trouble in the last couple of years, specifically with the Southern District of New York, so that's the Attorney General who prosecutes cases in the southern part of New York State. They ended up coming up with a non-prosecution agreement, where they admitted wrongdoing but didn't get prosecuted. What the wrongdoing was that they admitted, is that they were essentially acting as almost henchmen for the Trump campaign. So, during the 2016 electoral campaign they went out and found a number of accusations by women of premarital and extramarital affairs and what they did was they paid off those women, gave them hush money to squash the stories and to protect the then-candidate, Trump..Now, none of this is controversial. This is an open subject of this non-prosecution agreement. In terms of the non-prosecution agreement, American Media, which is the parent company, was not allowed to engage in any more criminal activity. If they do engage in any more criminal activity, they could end up having that prosecution reopened, where they've already admitted wrongdoing and it's a pretty serious felony offence, it's about campaign finance laws, and so forth..Now, in the meantime we have Jeff Bezos, Amazon's CEO who, in his personal capacity owns a newspaper called the Washington Post. Now, the Washington Post– it has nothing to do with Amazon. This is just a side project of his. The Washington Post has been very vocal or critic of the Trump administration and has often captured the ire of the president and he's many times tweeted angry things about the Post, and he's also tweeted a lot of vitriolic statements about Jeff, who he refers to as Jeff Bozo. So, there's a lot of animosity between the two of them..Now, we're getting to the meat of what's happening here. A couple of weeks ago, there was a story in the National Enquirer breaking news that Jeff Bezos has had an extramarital affair with a woman called Lauren Sanchez. As you know, as we've published it on our site, him and his wife are divorcing potentially, around this affair. We don't know what the whole story is there. But they broke the news of this affair and they actually published some private texts that were sent between Sanchez and Bezos during the course of this affair. All right, so that's out there. That's in the public domain..Now, what happened this week on Friday morning, or late Thursday evening, in American time Jeff Bezos published an explosive blog post detailing what looks a lot like a threat of extortion or blackmail. Essentially, when this news was broken by the National Enquirer, Bezos was concerned, naturally enough, that somebody had stolen his text messages, right. As a CEO he has access to a lot of confidential information and naturally enough, he was a bit worried that this information is now perhaps being accessed by hackers or something like that. .So, he launches an investigation to try and figure out how his data got stolen, and as part of this, and as part of some other investigations by news media organisations a lot of people started to say, this is politically motivated. This is politically motivated out of the animus between Bezos and the Trump administration. Now, American Media obviously didn't like this, especially in light of their non-prosecution agreement. So, they reached out to Bezos and they essentially said to him, look, if you stop with your investigation, and if you stop saying that there may have been political motivations around our decision to investigate you, if you stop saying that, we won't publish nude selfies that we have of you. So, they have a bunch of nude pictures of Jeff Bezos that he sent to his partner, Lauren Sanchez, and they said, if you keep going, we're going to publish these and we're going to embarrass you. If you shut-up and make nice and remove all your public statements and stop investigating us, we won't. .Now, this of course, meets the federal definition for extortion. Now, in normal circumstances, somebody threatened with the exposure of their nudes may tend to back down. But Bezos, he didn't get where he is by being a pushover and instead, he took the fight directly to the National Enquirer. He published all of these emails and he essentially accused them of extortion, and he accused then of acting, again, as thugs, potentially, for the Trump administration. So, this has obviously just been completely explosive. There're also some Saudi connections that even go beyond the scope of what I'm explaining here..But all in all, just a crazy story but I think one that really underscores the risks of going after somebody, like Bezos, the world's richest man, the owner of what is usually one the world's biggest companies, between number one and number five biggest companies in the world and who is not the kind of person to take things laying down..It's so interesting, the whole thing, and just for context for our SA community. The National Enquirer is a salacious publication, isn't it, Felicity? .Yes, a tabloid of the lowest sort..So, it isn't something that would be… They'd always be looking to find pictures, with long lenses of Britney Spears because she's overweight, etc., so it really plays to the most, base emotion of mankind. It's so interesting that Bezos, reading the email or the blog that he published on media so, anybody can go. It's on and the whole world can access it. In there, and by republishing the emails that The Enquirer's parents sent him – you can see these pictures they've got on him are pretty embarrassing and the whole, well I certainly didn't see any pictures but they describe the pictures that they have on him, and those pictures aren't the kind of thing that anybody wants to have seen. I think the one was described as very similar to what Malusi Gigaba was sending out – a 'dick-pic' or something. .Yes, a 'dick-pic.'.So, it's one of those things that you might expect being, if that's your mindset that the person you're trying to strongarm or blackmail would backdown very quickly because goodness, they don't want the world to see what they do in their private lives. But well-done to Bezos. He clearly would have thought about this very carefully and he would have weighed it up in both ways, and in every possible way, and here you have the richest man in the world fighting with the most powerful man in the world, if you like, Donald Trump on the one hand, trying to shut Bezos up and get The Washington Post to tow the line. And Bezos saying, 'up yours mate, I don't care what you show about me – there's a greater national interest here.'.So, you're going to find the Trump supporters perhaps reinforced in their view that Bezos is the anti-Christ. On the other hand, you'll have the anti-Trump supporters saying, look at what a low-life this is, he's even stooped to this level and used, again, The National Enquirer. But the point you made right in the beginning that The National Enquirer is hugely exposed because of that previous court case. What could happen now in the wake of these disclosures?.It's a very interesting and there are several things that could happen. So, first of all, the non-prosecution agreement only covers the corporate entity. It doesn't cover the individuals. So, David Pecker the CEO, there's a lawyer, Fine (can't remember his first name), who was instrumental and tried to setup this deal. Those people could be exposed in their personal capacity if this is found to be felony extortion, which obviously, is illegal. So, they have legal jeopardy in that sense, but perhaps more importantly, this reopens the non-prosecution agreement because the AG's Office in the Southern District of NY – they said, 'we won't prosecute you on this, although we have clear evidence of wrong doing, on the grounds that you don't continue to do similar things.' .So, if they are continuing to do similar things, that prosecution is reopened. The non-prosecution agreement no longer applies, and American Media is now fully exposed to all the legal risk of campaign finance law violations, and various other kinds of things, possibly even organised crime charges, some people say. .So, this really opens up serious jeopardy for them, which then of course poses a risk to President Trump because there might be more dirty laundry to air and if these morally suspect folks at the National Enquirer are looking to cut deals now, who knows what else could come out. It's such a bizarre thing for them to do but I think it just shows that they feel that they can act with impunity and actually, several other people have come forward and said, they've had similar threats from the National Enquirer, historically, where the National Enquirer is like – stop doing this thing or we're going to publish embarrassing information about you. So, I don't think this is their first go at this type of manipulation but they picked the wrong dude. .Indeed, and wasn't there another publication that had a problem? It, in fact, went out of business because it took on Peter Thiel in a similar way, trying to blackmail him. Then he got the wrestler, Hulk Hogan, he supported him in the fight against that publication. .Yes, that was Gawker, that's a couple of years back..I know we are pushing the patience of our listeners but it reminds me of that amazing book, 'The End of Power – by Moises Naim,' who was the former trade and industry minister in Venezuela and left there when things went pear-shaped in that country and has been a very strong protagonist thereafter. But it's one of those classic books that unpacks how power has shifted from the status quo or from what we've been grown up to believe to just the normal, every man. Here you have every man in the form of Bezos, who can go onto the internet, layout his case and the public can decide. Whereas in the past, he might not have had that opportunity. So, interesting the way the world is changing and I really believe, for the better.

The Editor’s Desk: The Total gas strike will change SA forever

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