New lease on life for South African oil and gas exploration

Feb 12, 2002 01:00 AM

Technological advances that allow crude oil to be recovered in ultra-deep waters, as well as promising prospects revealed by reprocessing old seismic data using modern techniques, have given the South African oil and gas exploration industry a new lease on life.
President Thabo Mbeki referred in his state of the nation address to the fact that SAR 500 mm has already been invested by an international consortium, which includes empowerment group Mvelaphanda Energy, to find natural gas off the west coast.

This is only one of several initiatives that have turned what had become a declining sector into one of the biggest potential sources of foreign direct investment in the coming decades. Mvelaphanda and its partners have established from the four wells they have drilled so far in the Orange River Basin's Ibhubesi field, that it contains at least 600 bn cf of gas.
Combined with Namibia's proven reserves, that gives South Africa sufficient natural gas to supply its industrial energy demands for decades to come. Mvelaphanda Energy CEO Philip Rhind said the consortium, which includes US exploration and production companies Forest Oil and Anschutz Overseas as majority partners, was so confident of the commercial viability of its South African assets that the emphasis had recently shifted from exploration to finding long-term buyers for the gas.

The brighter future for the exploration industry dovetails with a government investigation into the most efficient use of west coast gas, part of which includes the feasibility of a coastal pipeline from Namibia's offshore gas fields to Eastern Cape. This would supply Namibian and South African power stations as well as industry at Saldanha, Cape Town, Mossel Bay and the proposed Coega complex.
In addition, the minerals and energy department approved a prospecting sub-lease agreement covering Block 3 b/4 bn off the west coast, granted to Global Energy of the US. Global MD Randall Thompson said recent reprocessing of seismic and other data "confirmed avery large structure, in which reservoir sands could contain billions of barrels of oil reserves".

Global technical adviser Bob Zilinski described the prospect as "analogous to the very successful deep-water Angola trend located offshore the Congo River delta". Block 3 b/4 bn is adjacent to and south of the Kudu gas field offshore Namibia, and Zilinski says a significant natural gas find is the secondary objective of Global's exploration efforts. Recent technological advances, including the use of floating storage and offloading vessels, have made fields in deep waters commercially and technically viable.

Source: Business Day
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