Shell has entered the burgeoning South African offshore exploration sector by farming-in to two blocks recently recanted by ExxonMobil and Norwegian state-controlled Equinor.
Shell will acquire a 50pc working interest in and operatorship of the Transkei and Algoa blocks, off South Africa's east coast. UK-based independent Impact Oil and Gas recently took full control of these blocks, which are near two recent large gas condensate discoveries.
A partner of Shell's calibre highlights "the significant value potential of our exceptional South African exploration portfolio," said Impact's chief executive Siraj Ahmed. Indeed, Shell's involvement does bring the world's biggest private-sector LNG seller into the regional sector.
Under the agreement Shell has been granted the option to acquire an additional 5pc working interest should the venture decide to move into a third renewal period, which is expected around 2024.
The Algoa block is in the South Outeniqua Basin, a short distance east from Block 11B/12B that contains the Brulpadda gas condensate discovery. Total recently made a further significant gas condensate discovery here following at the Luiperd exploration well, which it is now testing.
The Transkei block is northeast of Algoa in the Natal Trough Basin, where Impact has identified what it calls highly material prospectivity.
Impact and Shell plan to acquire more than 6,000km² of 3D seismic data, probably in the first quarter of 2022. The two blocks cover around 45,838km² in water depths up to 3,000m.
Closing of the transaction is subject to conditions including government approval. Shell and Impact will each hold 50pc participating interests in the Transkei & Algoa blocks following completion. Canadian firm Africa Oil has a 31pc shareholding in Impact.
Impact's agreement with Shell follows its recent farm-in agreement with Silver Wave Energy for a 90pc working interest and operatorship of Area 2.
