South Africa seeks bids for offshore blocks

Uchenna Izundu
International Editor

LONDON, Mar. 26 -- South Africa has invited companies to explore for oil and gas on 34 offshore blocks under its second licensing round since the apartheid regime ended in 1994.

At a seminar at the South African High Commission in London, Jim Gulland, business development manager at CGG Veritas, which is promoting the licensing round, said blocks are on offer in the northern Orange basin (Area A), the southern Orange basin (Area B), the Proximal Bredasdorp basin (Area C), and the Algoa basin (Area D).

Area A spans 70,000 sq km in 13 blocks or partial blocks available for bidding. Area B, off Cape Town, covers 41,000 sq km and is in deep water. The government is offering eight blocks or partial blocks in this area. Area C covers 14,700 sq km in seven blocks or partial blocks up for bid. Area D covers 12,454 sq km with six blocks or partial blocks on offer.

Area A is a gas province dominated by Ibhubesi and Kudu fields. Only three wells have been drilled in this area, which source rocks of Hauterivian, Barremian, and Aptian age. Ibhubesi produces 182 MMcfd of gas. Forest Oil Corp. has submitted a field development plan to boost production after 2009-10.

South Africa's Oribi oil field, which produces 2,260 b/d, and Sable oil field, which produces 9,700 b/d, are in decline.

"We believe that future oil production will be deepwater," said Dave Broad, resource evaluation manager at Petroleum Agency SA.

Lindiwe Babuz, the South African High Commissioner, stressed that South Africa is largely unexplored and that the government is not demanding a signature bonus. Under the apartheid regime, the energy policy was based on secrecy and self sufficiency, she said, but that has changed.

"We want South African to have access to global energy supplies and affordable supplies for the poor by 2014," she added. "We want to reduce our dependence on coal."

Companies that attended the seminar included ExxonMobil Corp., Royal Dutch Shell PLC, Devon Energy Corp., Statoil ASA, and Sound Oil PLC of London.

The closing date for applications is Jul. 31.

Contact Uchenna Izundu at uchennai@pennwell.com.

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