Russian Giant and South African NOC sign Multi-Billion Dollar Deal
Russian Rosgeo agrees on USD 400m investment with state owned PetroSA to develop exploration activities on South African coast.
“[The agreement] is aimed at developing bilateral relations and will strengthen the company’s presence in the African market.”
Roman Panov, Rosgeo
Russian Exploration Company Rosgeo has signed a USD 400 million agreement with the state-owned South African refiner PetroSA at the BRICS Summit held in Xiamen, China from September 3rd – 5th 2017.
Rosgeo CEO Roman Panov explained the agreement “is aimed at developing bilateral relations and will strengthen the company’s presence in the African market.” Never before has the Russian explorer ventured into South Africa. So far, the company’s operations across the continent, from Algeria to Mozambique and Ghana had not yet reached South Africa.
Financed by Russian and South African banks, the two players will take part in exploration activities in blocks 9 and 11a off the south coast of South Africa. It was reported Rosgeo would own 70 percent of the project, while PetroSA would take up the remaining 30 percent, but neither of the parties involved in the joint venture confirmed this ownership structure.
Rosgeo will reportedly conduct geological exploration works as well as drilling exploratory wells using advanced technologies. More specifically, the Russian company will explore over 4,000 square km of surface using 3D seismic operation vessels and cover 13,000 km of gravity-magnetic exploration work. Statements released on both of the companies’ websites explained the project could lead to “four million cubic meters of gas being extracted daily and subsequently delivered to PetroSA’s gas-to-liquids refinery in Mossel Bay, on the south coast.”
Nhlanhla Gumede, the interim Chairperson at PetroSA explained if successful, this project would be proof BRICS countries have the ability to “develop partnerships and share knowledge between [themselves].” This project is expected to re-position the South African company for future growth perspectives as it has repeatedly reported poor results and faces depleting gas resources.
“[The] discovery of hydrocarbons on [South African] shores has the potential to bring significant revenues to the country and prove [its] oil and gas prospectivity.”
Luvo Makasi, Central Energy Fund, South Africa
In addition to bringing cheaper feed into PetroSA’s refinery terminal in Mossel Bay, the chairman of the Central Energy Fund, Luvo Makasi, commented on the potential revenues the joint venture would bring to the country explaining that “discovery of hydrocarbons on [South African] shores has the potential to bring significant revenues to the country and prove [its] oil and gas prospectivity.”
According to a statement released on Rosgeo’s website, the “oil reserves are estimated at more than 50 million tons” and “the forecasted gas resources are 42 trillion feet.”
Writer: Alan Le Roux