Drilling of an oil-rich well off the west coast of South Africa is expected to begin before the end of the year.
This comes after the government confirmed that Azinam South Africa, backed by US-Canadian mining tycoon Robert Friedland, is the operator of the lucrative Block 2B.
Block 2B is located approximately 300 km north of Cape Town, off the coast of a small fishing village on the west coast of Hondeklip Bay. The oil, covering an area of 3,062 square kilometers, was first discovered here by the Southern Oil Exploration Corporation (Soekor) in 1988.
While drilling thick sandstone at depths of up to 3350 meters, tests conducted on the Soeker’s A-J1 well showed an inflow of 191 barrels of oil per day. Subsequent exploration of Block 2B in the shallower AJ-1 zone showed the potential of Gazania-1, which is estimated to contain 349 million barrels of recoverable oil.
Africa Energy, the oil and gas company that owns local offshore exploration assets, confirmed Monday that the ownership deal, signed in 2020, has been approved by the South African government. Under the terms of the deal, Azinam will become the operator and holder of 50% of the license in Block 2B.
“This deal will allow the well to be drilled to test the broader potential of the A-J1 discovery. Azinam and partners plan to produce 349 million barrels of oil, ”explains Daniel McKeown, managing director of Azinam, referring to other minority shareholders, Africa Energy (27.5%), Panoro Energy (12.5%) and Crown Energy AB ( 10%). %).
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Azinam South Africa is backed by global investment firm Seapulse, which co-founded Seacrest Capital Group and I-Pulse in 2018. I-Pulse co-founder and chairman Friedland noted that the successful development of Block 2B had the potential to provide South Africa with “much needed power.”
The project, which was subjected to a rigorous feasibility study and economic assessment in 2020, focuses on palladium, platinum, rhodium, nickel, copper and gold.
With the capital and project management capabilities provided by Seapulse, Azinam hopes to drill Gazania-1 by the end of 2021. The initial drilling process refers to drilling on the seabed.
“With the new 3D seismic survey, we can see that A-J1 has drilled an inclined portion of a potentially much larger accumulation of oil in a number of reservoirs,” said Paul Murray, director of Azinam Group.
“Confirmation of a significant oil field in Block 2B, in favorable ocean conditions and offshore, represents a significant opportunity for South Africa and Block 2B licensees to secure the first major offshore oil production in South Africa.”
Africa Energy expects the cost of the Gazania-1 well in the third quarter of 2021 to cost approximately $ 21 million.