PetroSA commissions exploration rig to extend gas reserves

PetroSA, South Africa's state oil company, commissioned an exploration rig to drill off the country's southeast coast in a bid to extend the life of its gas reserves to 2020. The new rig will drill PetroSA's EM fields from February, Dan Marokane, the company's general manager of production and exploration, said.
PetroSA wants to extend reserves to feed its gas-to-liquid fuel refinery in Mossel Bay by seven years beyond 2013 when supplies from the $ 480 mm South Coast Gas Project run out. The 50,000-bpd plant has gained favour as crude oil prices trade close to a record.

The FA Platform's "life is out to 2020 and we want to take the gas reserves out to 2020," Marokane said. "Some of those new wells have already been approved by the board and we've gone to the market for a rig to expedite the appraisal of those fields."
The company will have the use of the rig for about 18 months at a cost of about $ 250,000 (R 1.7 mm) per day. Each of its holes will cost about $ 35 mm (R 249.5 mm) to drill, Marokane said, without saying how many the company plans to sink.

PetroSA will abandon its Oribi and Oryx fields next year and plans to stop output from its Sable well in 2008, with the South Coast Gas Project starting to feed gas to the FA platform by about June next year, Marokane said.
Texas-based Pioneer Natural Resources owns a 45 % stake in the South Coast project, which will link small pockets of gas and pipe them to the Mossel Bay refinery via the platform. In the early stages of the project, PetroSA's production of condensate will rise, cutting the amount it needs to buy on the open market by about half, Marokane said.

The platform will shut down in October to prepare the links it needs to process South Coast gas.
PetroSA is also pursuing opportunities in Mozambique, Egypt, Sudan, Gabon, Equatorial Guinea, Algeria and Qatar that may allow it to increase fuel production to the equivalent of about 80 000 barrels of oil a day, PetroSA Chief Executive Sipho Mkhize. It will use experience in building and operating gas-to-liquid fuel facilities, and the promise of building them in other African states, to win the right to explore, he added.

PetroSA and the department of minerals and energy plan by the end of next year to conclude an "integrated gas strategy", detailing ways of creating a larger gas market in South Africa, including gas-fired power stations and supplying gas to heavy industries at the south-eastern port of Coega, Marokane said.
"We have a vision of playing in the gas market," Marokane said. "The market for gas consumption in southern Africa is in South Africa."