Petro SA signs R5bn deal with Russians
An agreement strongly repositioning PetroSA towards growth was this week signed between PetroSA and a Russian geological exploration company, Rosgeo, and is expected to bring oil and gas development of about $400-million (R5.2-billion) to South Africa. The projected extraction of up to 4-million cubic metres of gas daily from blocks 9 and 11a off the Cape South Coast will benefit the PetroSA’s gas-to-liquids refinery in Mossel Bay.
PetroSA, the country’s national oil company, and Rosgeo, geological exploration company of the Russian Federation, this week signed an agreement that will see about US$400-million invested in oil and gas development. The agreement was signed in the presence of ministers of energy at the ninth annual Brics Summit currently under way in Xiamen, Peoples Republic of China.
“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,” said Nhlanhla Gumede, PetroSA’s interim chairperson.
According to Daily Maverick (www.dailymaverick.co.za) the deal, several years in the making, recently sparked controversy when claims of political meddling emerged through court proceedings. The site states, “Daily Maverick previously reported on claims by two former PetroSA board members that their removal from the board was allegedly due to a tussle about this lucrative deal. William Steenkamp and Owen Tobias brought an urgent high court application last week in a bid to challenge their removal.”
Within the framework of the agreement, Rosgeo is supposed to conduct a considerable volume of geological exploration work. In particular, it is planned to carry out more than 4 000sq km of 3-D seismic operations and over 13 000km of gravity-magnetic exploration works, as well as the drilling of exploratory wells.
Rosgeo CEO Roman Panov, Central Energy Fund chair Luvo Makasi and Gumede signed the agreement.
Panov stressed that within the framework of the contract, Rosgeo will use advanced technologies, including 3-D exploratory works, and modern seismic and drilling vessels.
Strategic search for oil
“The signed agreement is aimed at developing bilateral relations and will strengthen Rosgeo’s presence in the African market,” he said.
Makasi said the search for oil and gas resources in South Africa remains very strategic for the country’s energy security and is extremely important to PetroSA’s continued and sustainable survival.
“South Africa’s oil and gas potential remains largely unexplored. This exploration effort presents a significant upside to both the country and PetroSA. 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,” he added.
Gumede said the agreement represents a significant development towards building a new strategic thrust for the company. –
According to an agreement signed with a Russian company for geological exploration, Mossel Bay’s PetroSA plant will benefit from the projected extraction of up to 4-million cubic metres of gas daily from blocks 9 and 11a off the Cape South Coast.