South Africa launches fourth licensing round

South Africa will open its fourth licensing round Mar. 15 with acreage in two license areas: the Orange basin off the west coast and Tugela off the east coast.

Mar 12th, 2009

Uchenna Izundu
OGJ International Editor

LONDON, Mar. 12 -- South Africa will open its fourth licensing round Mar. 15 with acreage in two license areas: the Orange basin off the west coast and Tugela off the east coast.

"Minimum bids should be for at least a one-fourth degree block and may be any contiguous shape within the bid areas," said the South African Agency for Promotion of Petroleum Exploration & Exploitation (Petroleum Agency SA).

The Orange basin deepwater area comprises 43,000 sq km with 18 quarter degree blocks or parts thereof on offer. This area lies in 1,000-4,000 m of water and holds gas to light oil potential in the northern part relying on a postulated Turonian-Cenomanian source rock.

"In the south of this area we expect the Cretaceous source rocks to be oil-prone," David Van der Spuy, resource evaluation manager at Petroleum Agency SA, told OGJ.

Tugela covers shallow-to-deep water of up to 3,000 m. It is just under 49,000 sq km with 22 quarter-degree blocks or parts thereof available for operators. "Here source rock quality is unknown but by analogy with other basins, we expect oil in the deeper basin," Van der Spuy said.

Operators can secure either a "technical cooperation permit" or "exploration right" with the latter taking precedence. Successful companies will have an initial 3-year exploration period and this could be renewed for three terms of 2 years each, bringing it to 9 years total. Companies could produce hydrocarbons over a 30-year term, which is renewable.

Van der Spuy told OGJ that it has already received more than 10 enquiries from mainly international companies since the announcement was made. "It's still very early days," he said. Interested applicants must submit requests to the agency to view data in Cape Town.

PGS Exploration holds 2D seismic for the northern section of the Orange basin. Navigation and SEG-Y data for key 2D lines (about 900 km), well data, logs, and reports are available for Tugela.

"The license round aims at increasing and sustaining South Africa's current oil and gas production with a view to increasing the country's level of self sufficiency and economic development," said Petroleum Agency SA.

Contact Uchenna Izundu at uchennai@pennwell.com.

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