The first exploration for shale gas in South Africa will begin in the next financial year, the government said yesterday, following years of postponement.

"One area of real opportunity for South Africa is the exploration of shale gas," the statement said. "Exploration activities are scheduled to commence in the next financial year. This will lead to excellent prospects for beneficiation and add value to our mineral wealth."

Delays in awarding exploration licenses and lower oil prices led to firms such as Royal Dutch Shell pulling back a year ago on planned shale gas projects in the onshore Karoo Basin.