Drilling to start two years late

The Star Early Edition - - COMPANIES -

ROYAL Dutch Shell, Europe’s largest oil pro­ducer, might drill South Africa’s north-west coast two years later than planned be­cause of reg­u­la­tory un­cer­tainty, Jan Willem Eg­gink, the gen­eral man­ager for up­stream at Shell’s lo­cal unit, said yes­ter­day. Drilling that was an­tic­i­pated to start this year might take place in 2016. Shell, Exxon Mo­bil and Anadarko Pe­tro­leum are among the firms that have ob­jected to pro­posed changes to the 2002 Min­eral and Pe­tro­leum Re­sources De­vel­op­ment Act on the grounds that they are too vague and will un­der­mine in­vest­ment. The amend­ments in­clude giv­ing the state the right to a free 20 per­cent stake in all new en­ergy ven­tures and to buy an un­spec­i­fied ad­di­tional share at an agreed price. Shell said last year it might drill a well this year that would cost as much as $200 mil­lion (R2.2 bil­lion) in the off­shore Orange Basin. The area was close to the bor­der of Namibia in wa­ter rang­ing from 500m to 3km in depth, Eg­gink said. South Africa had proven oil re­serves of 15 mil­lion bar­rels in Jan­uary 2011, lo­cated to the south and off the west coast near the Namib­ian bor­der, ac­cord­ing to Oil and Gas Jour­nal. But the coun­try has no “sig­nif­i­cant” crude out­put, ac­cord­ing to the US En­ergy In­for­ma­tion Ad­min­is­tra­tion. – Bloomberg

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