PetroSA and Pioneer sign joint venture deal for Cape gas

Sep 29, 2005 02:00 AM

South Africa's national oil company, PetroSA, has signed a joint venture agreement with US-based Pioneer Natural Resources Company to develop the gas fields off the Cape's south coast.
The gas resource, which is expected to produce about 100-mm cf of gas and 3000 barrels of condensate a day between 2007 and 2012, will be used as feedstock for PetroSA's gas-to-liquids plant at Mossel Bay.

PetroSA said at the release of its results for the year to March, that it planned to invest $ 800 mm to develop South Africa's offshore gas fields and explore for reserves in the rest of Africa, so as to extend the life span of its gas-to-liquids production facility.
Existing gas reserves in South African waters are expected to run out by 2007 but the company believes its investment programme could extend the life of the Mossel Bay plant to 2018. Thereafter, a decision would have to be made whether to convert the plant to a conventional oil refinery, with feedstock brought in by tanker.

The company reported a pre-tax profit of R 1,8 bn for the year to March, from R 240 mm in the previous financial year, boosted by soaring oil prices and a return to stable production at its Mossel Bay refinery. PetroSA will be the operator of the south coast gas joint venture, with a 55 % interest.
The agreement is subject to approval by the board of directors of both companies, which PetroSA expects to have by the end of October. PetroSA president and CEO Sipho Mkhize said that the development of the south coast gas fields would contribute towards the sustainability of the refinery at Mossel Bay.

Source: Business Day
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