* Plunging crude oil prices jeopardise shale globally
* Shell says delays in Karoo licence play role
* Government has yet to clarify fracking regulations (Adds analysis, background and more Shell comments)
JOHANNESBURG, March 16 (Reuters) - Royal Dutch Shell is pulling back from its shale projects in South Africadue to lower energy prices and delays in obtaining anexploration licence for the onshore Karoo Basin, it said onMonday.
A more than halving of crude oil prices since Junehas put high cost projects such as shale gas exploration injeopardy around the globe, and Shell South Africa said waitingsix years for a licence for Karoo had not helped.
Chairman Bonang Mohale, who said the company was going to a"low cost holding position", told Reuters oil prices would needto be between $60 to $80 a barrel and South Africa would need topresent "excellent commercial terms" for the company to resumeits operations.
"Capital is mobile and is looking for the best commercialterms everywhere else in the world," he said. "We were hopingthat we would have had a licence (for Karoo) in 36 months."
Officials at the Department of Mineral Resources could notbe reached for comment.
An estimate by the U.S. Energy Information Administration, gives South Africa the world's eighth biggest shale reserves,with the potential to transform an economy that has always beena big oil and gas importer.
Shell's retreat is a blow to the South African government,which has been criticised by oil firms for delaying issuingexploration licenses, most notably in the Karoo region, which isbelieved to hold up to 390 trillion cubic feet of technicallyrecoverable reserves.
Shell had applied for an exploration license covering morethan 95,000 square km, almost a quarter of the Karoo.
A study commissioned by the company said extracting 50trillion cubic feet or 12.8 percent of potential reserves, wouldadd $20 billion or 0.5 percent of GDP to the South Africaneconomy every year for 25 years and create 700,000 jobs.
Green groups and land owners in the Karoo, a vastsemi-desert wilderness stretching across the heart of SouthAfrica, have argued that exploring for shale by fracking, orhydraulic fracturing, would cause huge environmental damage.
The government has been accused of dragging its heels infinalising policy for gas and oil exploration. Pretoria has alsosaid it wanted a 20 percent free stake in exploration ventures,before companies have covered their costs.
"At a time of low oil prices and exploration budgets beingslashed, the onus is on governments to put in place clear andattractive investment conditions," said Anne Fruhauf, seniorvice president at Teneo Intelligence.
"The longer the government takes to clarify frackingregulations, the less sense it makes for a company like Shell tomaintain anything more than a holding operation in relation toits South African shale project."
(Reporting by Ed Cropley and Peroshni Govender; Writing by JoeBrock; Editing by James Macharia and Philippa Fletcher)
