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South African President Cyril Ramaphosa looks on as he delivers his annual State of the Nation address on Feb. 7, 2019, in Cape Town, South Africa.RODGER BOSCH/AFP/Getty Images

South Africa’s first deep-water hydrocarbon discovery, in a field with a 20-per-cent Canadian ownership stake, has the potential to transform the country’s faltering economy, President Cyril Ramaphosa says.

French oil company Total SA announced the world-class discovery on Thursday. The block, which could hold one billion barrels of gas condensate and could generate US$70-billion in revenue over the next two decades, is located 175 kilometres off the southern coast of South Africa.

Calgary-based Canadian Natural Resources Ltd. holds a 20-per-cent stake in the block in the Outeniqua Basin, while Total holds 45 per cent, Qatar Petroleum 25 per cent, and Main Street, a South African consortium, owns the rest.

“This could well be a game-changer for our country, and will have significant consequences for our country’s energy security and the development of this industry,” Mr. Ramaphosa said on Thursday night in his nationally televised state-of-the-nation speech.

“We are extremely encouraged,” he said, noting that some analysts are describing the discovery as a “catalytic find.”

Total said the discovery was made by its Brulpadda well, which was deepened to a final depth of 3,633 metres. “With this discovery, Total has opened a new world-class gas and oil play, and is well-positioned to test several follow-on prospects on the same block,” company vice-president Kevin McLachlan said in a statement on Thursday.

He described the site as a “challenging deep-water environment.” Analysts have said the area is subject to huge waves, strong currents and difficult weather. Total said it drilled the exploration well with the latest-generation drilling ship, using its experience in similar environments such as the area west of the Shetland Islands in the North Sea.

South Africa, which imports most of its oil, has been hoping for offshore oil discoveries for years, but those hopes were dashed until now. The government has been planning a new law for the oil and gas industry in an attempt to encourage more investment in oil exploration.

“Government will continue to develop legislation for the sector so that it is properly regulated for the interests of all concerned,” Mr. Ramaphosa said on Thursday.

The deep-water discovery by Total could trigger a new wave of investment in South Africa. “We believe South Africa holds the potential for many more such discoveries,” N.J. Ayuk, executive chairman of the African Energy Chamber, said in a statement on Thursday.

“The oil industry hopes this will be a catalyst and encouragement for all policy-makers to work on an enabling business environment for exploration and drilling activities in South Africa,” he said.

Other oil companies such as Exxon Mobil Corp. and Eni SpA hold stakes in the area near the latest discovery and could now decide to boost their investments.

South Africa’s economy has lurched into recession several times in recent years, and even this year GDP growth is expected to be less than 2 per cent, below the rate of population growth.

Mr. Ramaphosa, who took office last year after the resignation of his predecessor, Jacob Zuma, has been focused on an ambitious investment drive with the goal of luring US$100-billion in investment over the next five years.

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