Western South Africa object of gas use study, offshore plays

March 4, 2002
Action is picking up on several fronts to discover, transport, and sell gas and oil in and off the western part of southern Africa.

Action is picking up on several fronts to discover, transport, and sell gas and oil in and off the western part of southern Africa.

The South African government's Department of Minerals and Energy and Shell International Gas signed a letter of intent in mid-February to develop a sustainable gas industry in South Africa's Cape Provinces.

At least three separate exploration/ development and appraisal projects are under way in the Orange basin in the southeastern Atlantic Ocean:

  • Shell is further appraising Kudu gas field off Namibia.
  • Global Energy Holdings LLC, Denver, won a block off South Africa and plans to evaluate gas and unexplored oil plays.
  • Forest Oil Corp. is working to commercialize Ibhubezi (formerly A-K) gas field off South Africa.

Shell agreement

Shell South Africa and the ministry will study the potential to introduce gas from Kudu field off Namibia into the energy economies of South Africa's Western, Eastern, and Northern Cape provinces.

The three provinces extend from Namibia's Atlantic coast border with South Africa, including Cape Town and Port Elizabeth, as far east as Lesotho and almost to Durban. The provinces occupy nearly the southwestern half of South Africa's 471,000 sq km area. Markets tend to lie along the coast.

The 6-month study is to involve assessment of gas delivery infrastructure such as pipelines and various market development options including gas-fired power generation, gas-to-liquids manufacture, and application in industrial developments, Shell said.

Yiaw-Hin Wee, general manager of Shell South Africa's Gas and Power Division, said, "We look forward to working with the Department of Minerals and Energy and key nominated stakeholders like PetroSA (merged Mossgas & Soekor) in the development of all possible markets and assessment of delivery infrastructure options.

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"This comes at a time when additional appraisal activities are in progress to prove up more reserves in the Kudu field in Namibia and the potential development of an LNG scheme."

Kudu is to start up in 2005, producing through a subsea pipeline to a gas treatment plant in Namibia. After treatment, the initial gas is to feed a new 400-MW power station in the diamond mining town of Orangemund, Namibia. The station will supply 100% of Namibia's electricity demand.

Kudu field interests are Shell 75%, ChevronTexaco 15%, and Energy Africa Ltd. 10%.

The study proponents will formulate recommendations for submission to the South African government and Shell South Africa shareholders.

Rod Crompton of the Department of Minerals and Energy said the government is facilitating the introduction of gas into the economy by engaging with several companies.

Orange exploration

Meanwhile, one Denver independent plans to target an oil play concept untested in the Orange basin, while another works to commercialize an offshore gas discovery delineated in 2000-01.

A unit of Global Energy Holdings LLC, Denver, said the South Africa energy ministry and Petroleum Agency SA approved its sublease agreement on Block 3B/4B.

The 7.1 million acre block is in 300-1,200 m of water.

The 71/2 year agreement's first 18-month term requires acquisition of new proprietary seismic data, said Randall C. Thompson, managing director. Three remaining periods are optional.

Global's evaluation of the petroleum system on Block 3B/4B indicates that Middle to Late Cretaceous turbidite sandstone reservoirs are charged by Cenomanian-Turonian oil-prone, marine source rocks, said Bob Zilinski, technical advisor.

Late Cretaceous tectonic slumping has produced the structuring, with basinal-slope shales acting as the vertical seal trapping the hydrocarbons. Oil generation and migration commenced in the Early Tertiary and have continued to the present.

Global has identified a very large structure, known as the Pinotage prospect, to test this play on the block, Zilinski said. Pinotage is mapped at 67,400 acres, 273 sq km, in 600 m of water.

"This play is analogous to the very successful deepwater Angola trend located offshore from the Congo River Delta, which as yet remains untested in the vicinity of the Orange River Delta."

Block 3B/4B is adjacent to and south of a recently delineated discovery, Ibhubezi with several trillion cubic feet of gas in place. Similar gas prospects are the secondary objective on Block 3B/4B, Zilinski said.

Global intends for Block 3B/4B's test well to be the first deepwater exploration well drilled off western South Africa to test for oil in turbidite sandstones, similar to other prolific successes farther north along the western African coast, Thompson added.

Forest's efforts

Forest plans no drilling off South Africa this year and reckons gas could first flow sometime after 2003 from Ibhubezi gas field, discovered by the South African government company in 1987.

The company has booked no reserves but believes the field is of commercial size after four wells tested at a combined rate of 190 MMcfd plus condensate (see map, OGJ, Nov. 27, 2000, p. 32). Forest said 3D seismic data "enabled us to predict reservoir sands with 100% accuracy and gas bearing sands with 80% accuracy."

The company used the seismic signature from its wells to evaluate similar signatures from 2D seismic elsewhere on the acreage and is "confident that we have a large stratigraphic gas accumulation in this Orange River basin area."

Forest was acquiring more seismic data in mid-February to fulfill the seismic commitment on its deepwater blocks off South Africa and plans to interpret that data later this year. Efforts this year will focus on developing the prospect inventory for farmouts and drilling in 2003, said Robert S. Boswell, chairman and chief executive officer.

"This year in South Africa we hope to enter into definitive contracts to supply gas to various markets and to put into place financing for development of the field beginning in 2003," Boswell said.

Forest said it has identified South African markets for 750 MMcfd of gas. It signed memoranda of understanding with an LPG supplier, a government entity that wants to build a hard-briquetted steel plant at Saldanha, a Marubeni unit regarding conversion of a coal-fired power plant at Cape Town, and with Mossgas, a gas-to-liquids producer. Forest hopes to move two of the four to definitive agreements this year.

Interests in blocks 1 and 2A are Forest 70% and Anschutz Corp. 30%. Sasol Petroleum International holds 100% of Block 3A/4A, and blocks 5 and 6 are open.