Cairn India and PetroSA deal on oil exploration in South Africa

August 16th, 2012 - 10:17 pm ICT by IANS  

New Delhi, Aug 16 (IANS) Oil and gas producer Cairn India Thursday signed a farm-in agreement with PetroSA, South Africa’s national oil company, for crude oil and natural gas exploration in South Africa.

According to a Cairn India release, the closure of the transaction is subject to South African regulatory approvals.

Cairn India will be the operator in the offshore Block 1 in the Orange Basin off South Africa’s west coast and, through a wholly-owned South African subsidiary, hold a 60 percent interest in the block, with PetroSA holding the remaining interest.

The Orange Basin is an emerging hydrocarbon province with potential for material oil and gas discoveries. Block 1 will be an anchor exploration asset in South Africa and will augment Cairn India’s existing portfolio.

Block 1 covers a large area of 19,922 sq km and is currently in the initial stages of exploration. It has an existing gas discovery and identified oil and gas leads and prospects.

The company said that the agreement advances Cairn India’s strategic goal of growing its resource base by acquiring exploration and appraisal assets outside the Indian sub-continent.

It is learnt that at this stage there is no investment involved on Cairn India’s part. Its investment commitment is linked to its subsequent work programme on the project.

Cairn India has planned a capital expenditure of $2 billion over the next two years, while outgoing CEO Rahul Dhir had recently announced that the company was actively pursuing international ventures and acquiring of exploration blocks.

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