Africa Oil has increased its stake in Block 3B/4B, next door to where TotalEnergies hopes to drill a well in 2024.
The Canadian independent said it would buy a 6.25% stake from Azinam, a subsidiary of Eco Atlantic Oil and Gas, for $10.5 million.
The Africa Oil and Total blocks are both south of Namibia, where majors have made a number of discoveries.
Africa Oil will pay $2.5mn within 30 days, with the rest to come in tranches triggered by certain events. One payment of $4mn will come on completion of a farm-out to a third party. It will pay the final $1.5mn on spudding a first exploration well on the block.
If the deal completes, Africa Oil will have a 26.25% stake Block 3B/4B, while Azinam has 20% and Ricocure 53.75%. Africa Oil has an additional indirect interest, with a 15.02% stake in Eco Atlantic.
Africa Oil said the partners were making progress on a two-well plan for the block. They are in talks with potential partners to farm out a 55% stake in the licence.
The block covers 17,581 square km within the Orange Basin. It is southeast and on trend to discoveries such as Venus and Graff. A prospective resource report in March reviewed 24 prospects with total unrisked gross P50 prospective resources of around 4 billion barrels of oil equivalent.
Total set out its drilling plans in the Deep Water Orange Basin (DWOB) block in environmental plans filed this week by consultants SLR.
The French company has said it might begin drilling the first well on the area in 2024. In addition to drilling, the plan covers sonar bathymetry surveys and drop core sampling.
Total has a 50% stake in DWOB, while QatarEnergy has 30% and Sezigyn 20%.
According to the SLR document, other drilling off South Africa’s west coast could occur in Block 1, Block 2A and Block 5/6/7.
South Africa has proved to be a challenging country in which to work. Regulations are in flux and there is local opposition to new hydrocarbon developments.
Nevertheless, South Africa Minister of Mineral Resources and Energy Gwede Mantashe voiced his support for the industry recently.
The Northern Cape Province is “blessed” with oil and gas, he said, with around 70% of the Orange Basin. “At least three exploration wells offshore the Northern Cape province will be drilled in 2024 to prove the petroleum resource potential in the Orange Basin.”