In line with South Africa’s goal to boost its currently under-develop oil and gas exploration, the government announced the approval of Azinam Ltd’s farm-in application into Block 3B/4B permits in the offshore Orange Basin.
The approved application will allow Azinam Ltd, a margin-focused independent oil and gas exploration company, to acquire a 40 percent participation interest in the area, while license holder Ricocure (Pty) Ltd will keep a 60 percent share.
Once the acquisition process of these two blocks is complete, Azinam will become the “largest direct acreage holder in the region on a gross basis” with eights permits in South Africa and Namibia in water depths between 300 and 2,500 meters. Azinam now boasts a 80,530 sq km acreage from 62,000 sq km prior acquisition.
Azinam is vastly optimistic regarding the potential of the region given “historical drilling on the shelf and modern 3D seismic surveys of the Orange Basin that indicate the potential for both regionally significant shallow-water oil and gas projects and world-class deepwater discoveries.”
Daniel McKeown, Managing Director of Azinam, stated: “Azinam is delighted to complete this transaction with Ricocure, marking our official country entry into South Africa,”
According to company statements, Azinam plans to drill eight high potential wells offshore Namibia and South Africa, subsequently “testing the margin’s potential and exploiting low drilling costs”.
The company has noted the increased attractiveness of the region by the global hydrocarbon exploration industry. It further added: “A combination of heightened industry interest in the country and wells planned in 2019 and 2020, coupled with recent licensing and exploration activity in geologically analogous regions within the South Atlantic margins, including the Falkland Islands, Brazil, South Africa and Angola, has made the region one of the most attractive potential hydrocarbon provinces the globally,”
South Africa is currently focusing its energy strategy on increasing utilisation of natural gas resources for power generation but also to decrease reliance on imports, in line with the recently approved Integrated Resource Plan. The area’s attractiveness for upstream exploration is expected to grow dramatically in the next few months, given the country’s low offshore exploration rate and publicized government goals.