South Africa’s oil licensing round to put emphasis on Tugela Basin

Sep 27, 2005 02:00 AM

South Africa will launch a new licensing round for oil and gas exploration this year, with particular emphasis on opportunities in the Tugela Basin, off the KwaZulu-Natal north coast.
The last licensing round in South Africa, a relatively minor player in the upstream oil and gas sector, took place in 1994.

Mthozami Xiphu, the incoming chief executive of the Petroleum Agency SA (Pasa), the regulatory body for oil and gas exploration and production, said that Blocks 17 and 18 off the east coast would go under the hammer, as well as Block 1 off the west coast in the Orange Basin.
Blocks 17 and 18 were "very big blocks" that partially extended to deep water beyond 500 mm, Xiphu told the 18th World Petroleum Congress. Studies of this area had been done previously by, among others, Pioneer, which has a minority stake in Sable Oil.

Another representative from Pasa, Dave Broad, said the Tugela Basin was sparsely drilled with only four wells and there were many opportunities for acquiring further data. He added that South Africa's eastern continental shelf edge was much more stable than that on the west coast.
Xiphu said the agency would be ready to make an announcement on the new licensing round in October or November. There had been "immense interest" from international oil companies over the past two to three years in the oil and gas potential of the east coast.

"At some stage we had a count of about 21 companies [that were interested]," he said. This number included some of the 11 international oil groups that currently had permits in South African waters.
Xiphu believed that South Africa "definitely" had potential for further opportunities in the upstream oil and gas sector.
"We've done seismic data and we have heard from the operators themselves -- they are quite upbeat about our potential, both on the west coast and on the east coast." He singled out BHP Billiton, which was "quite confident" about deep-water opportunities on the west coast, where it has prospecting licences.

Xiphu said South Africa was continuing its plans to lay claim to a significant additional maritime area under the extended continental shelf claim project. As part of this, it was jointly conducting a survey of areas near the sub-Antarctic Edward Island with France. Coastal countries must submit applications to extend their continental shelves by 2009 to the UN Convention on the Law of the Sea.
South Africa shared the stage of the opening session of the congress with the giants of African oil and gas production -- Nigeria, Angola, Libya and Algeria.

Sasol chief executive Pat Davies, who chaired the opening session, said Africa accounted for about 9 % of the world's remaining oil and gas reserves. However, this figure disguised Africa's proportion of new global discoveries, which amounted to about a third of the world's new discoveries in the past five years.
Because about 70 % of Africa's oil production and nearly all of its gas was exported, there was "large potential" for added valuein the downstream sector, Davies said. He cautioned delegates to focus not only on upstream supply-side regions, as many other African countries were "not blessed with rich hydrocarbons".

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