State-owned PetroSA has signed an agreement with Russian geological exploration company Rosgeo that will result in the investment of about $400-million in oil and gas development off the coast of South Africa.
The agreement was signed at the ninth yearly Brics Summit that is currently under way in Xiamen, China.
The agreement involves the development in the exploration areas of blocks 9 and 11a off the South Coast of South Africa.
Rosgeo will conduct a considerable volume of geological exploration work within these blocks and plans to carry out more than 4 000 m2 of three-dimensional seismic operations and over 13 000 km of gravity-magnetic exploration works, as well as the drilling of exploratory wells.
The project envisages the extraction of up to four-million cubic metres a day of gas, which will be delivered to PetroSA’s gas-to-liquids refinery in Mossel Bay.
"The signed agreement is aimed at developing bilateral relations and will strengthen Rosgeo’s presence in the African market," Rosgeo CEO Roman Panov said.
Central Energy Fund chairperson Luvo Makasi said the search for oil and gas resources in South Africa remained strategic for the country’s energy security and was important to PetroSA’s continued and sustainable survival.
“South Africa’s oil and gas potential remains largely unexplored. This exploration effort presents significant upside to both the country and PetroSA,” he said.
He added that the upside for PetroSA was the possible expansion of its depleting gas resources.
“Discovery of hydrocarbons on our shores has the potential to bring significant revenues to the country and prove the country’s oil and gas prospectively,” Makasi noted.