PetroSA signs US$400mn deal with Russia’s Rosgeo

PetroSAPetroSA, South Africa’s national oil company, has signed a deal worth US$400mn with Russia’s geological exploration company Rosgeo, for the development of oil and gas in the region

The agreement was signed at the 9th annual BRICS Summit, held in China from 3-5 September 2017.

Under the deal, Rosgeo will be responsible for developing the exploration areas of blocks 9 and 11a off the South Coast of South Africa. In addition, the company will also be responsible for conducting more than 4000 sq km of 3D seismic operations and more than 13,000 km of gravity-magnetic exploration works, as well as the drilling of exploratory wells, said PetroSA.

According to the company, the project is aimed at extracting up to four million cubic metres of gas per day, which will be delivered to PetroSA's refinery in Mossel Bay, the southern processing plant.

Rosgeo said that it will use advanced technologies, including 3D exploratory works, and modern seismic and drilling vessels during the operations.

Roman Panov, CEO of Rosgeo, stated that the agreement is expected to develop the bilateral relations between the two countries and also strengthen Rosgeo's presence in the African market.

Recently, South Africa’s search for oil and gas resources remains strategic for the energy security. According to PetroSA, the deal is important for the company’s continued and sustainable survival in the region.

“South Africa's oil and gas potential remains largely unexplored. This exploration effort presents significant upside to both the country and PetroSA. The upside for PetroSA is the possible expansion of our depleting gas resources. Discovery of hydrocarbons on our shores has the potential to bring significant revenues to the country and prove the country's oil and gas prospectivity,” said Makasi chairman of the Central Energy Fund (CEF), to the SA News.

PetroSA said that the agreement represented a significant development for the company in building a new strategic plan towards its growth.

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