Norway’s Statoil in deal to join search for oil and gas offshore South Africa

Under the terms of the deal, Statoil said it had acquired a 35% stake in an exploration right (ER) for the Tugela South exploration area off South Africa’s east coast, which the company said “strengthens and increases the optionality" in its long-term international portfolio.

The remaining interests in 'ER 12/3/154' are held by operator ExxonMobil (40%) and co-venturer Impact Africa Limited (25%).

The Tugela South ER covers an area of about 9,054 square kilometres in water depths up to 1,800 metres.

Statoil’s senior vice-president for exploration activities in the Western Hemisphere Nick Maden said: "We look forward to working with ExxonMobil, Impact Africa and the South African government to explore for oil and gas in this new area for Statoil."

Maden said: "This opportunity is in line with Statoil’s exploration strategy of access at scale. It represents access into a frontier basin where we believe we see indications of an active petroleum system and which has impact potential."

According to Statoil, the deal allows it to enter the project "in an early exploration phase with a step-wise exploration programme". The firm said work commitments between 2015 and 2017 include the acquisition of 1,000 sq km of 3D seismic data and geology and geophysics studies.

Statoil said: "There are no commitment wells during this exploration period. The information obtained from the initial studies and seismic survey will form the decision basis for the co-venturers’ next steps in the exploration right."

Exxon Mobil’s opportunity exploration manager for Africa Dave Wilkin reportedly said in Cape Town in October that, despite tough challenges and the need to "keep a laser focus on costs", Africa continues to offer opportunities for the oil industry.

According to Wilkin, "the key to long term pathways to profit on the continent now lies in partnerships". He said: "Countries in Africa with good fiscal regimes will attract investors. Governments must offer transparent, long term relationships and an environment of long term stability."

South Africa’s energy minister Tina Joemat-Pettersson told a conference on liquefied petroleum gas (LPG) in October that, compared to other developing countries Africa !still has a large potential for increasing the role of LPG in the energy mix".

Joemat-Pettersson said: "Industry is projecting the potential for the South African market to grow to 20 kg LPG per capita per annum in the medium term. For context, Brazil and Malaysia use on average 40 and 65 kilogrammes of LPG per capita per annum, compared to South Africa’s 3-6 kgs. The more intensive usage occurs in the Western Cape Province, with varying levels in other provinces being a function also of proximity to supply infrastructure."

South Africa’s energy department is "working with industry to develop the market… to promote the shift towards increased gas and LPG consumption", Joemat-Pettersson said.