The embattled South African oil company, PetroSA, on Monday signed a U.S.$400 million agreement with the Russian state-owned geological company, Rosgeo, to be invested in oil and gas development.
The agreement was signed in the presence of Ministers of Energy at the 9th Annual Brics Summit currently underway in Xiamen, Peoples Republic of China.
Rosgeo chief executive, Roman Panov; Central Energy Fund chairman, Luvo Makasi; and PetroSA's interim chairperson Nhlanhla Gumede, signed the agreement.
According to PetroSA, the agreement involves the development in the exploration areas of blocks 9 and 11a off the south coast of South Africa which will see Rosgeo conducting a considerable volume of geological exploration work.
PetroSA intends to find technically competent and financially robust partners for its domestic oil and gas assets offshore South Africa by selling a part of its equity in each of the blocks in the Western Cape.
The project with Rosgeo is planned to carry out more than 4,000 square kilometres of 3D seismic operations and over 13,000 kilometres of gravity-magnetic exploration works, as well as the drilling of exploratory wells.
PetroSA said the project envisages extraction of up to four million cubic metres of gas daily to be delivered to PetroSA's Gas-To-Liquids refinery, in Mossel Bay, the South Coast processing plant.
Panov said Rosgeo will use advanced technologies, including 3D exploratory works, and modern seismic and drilling vessels.
"The signed agreement is aimed at developing bilateral relations and will strengthen Rosgeo's presence in the African market," Panev said.
Makasi said the search for oil and gas resources in South Africa remains very strategic for the country's energy security and was extremely important to PetroSA's continued and sustainable survival.
"The upside for PetroSA is the possible expansion of our 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 prospectivity," Makasi said.
Gumede said the agreement represented a significant development towards building a new strategic thrust for the company, adding that the agreement was strongly repositioning PetroSA towards growth.
"A find in block 9 and 11a would result in much desired exploration activity of our onshore and offshore oil and gas potential. The country and PetroSA will benefit greatly from the find. From the perspective of PetroSA it will result in cheaper feed into the Mossel Bay refinery," Gumede said.
Source: African Independent