National oil company PetroSA and Cairn India on Thursday signed a farm-in agreement for crude oil and natural gas exploration on the west coast of South Africa.
Cairn India will be the operator, holding a 60% interest in the block, through a wholly owned South African subsidiary, with PetroSA holding the remaining interest.
Block 1 covers an area of 19 922 km2. It has an existing gas discovery and identified oil and gas leads and prospects. Located in the Orange basin along the north-western maritime border of South Africa with Namibia, the block is on trend with the discovered Kudu and Ibhubesi gas fields.
PetroSA new ventures VP Everton September said that the company was delighted to join hands with one of Asia’s most successful exploration companies. “Cairn India brings with it extensive geotechnical and operating capabilities that will combine very well with our experience and understanding of the region," he noted.
Cairn India believes that the alliance was a step forward in its strategic goal of growing its resource base by acquiring exploration and appraisal assets outside the Indian subcontinent.
The Orange basin is an emerging hydrocarbon province with potential for material oil and gas discoveries. Block 1 will be an anchor exploration asset in South Africa and will augment Cairn India’s existing portfolio.
The closure of the transaction is now subject to South African regulatory approvals.