The Sable oilfield, where the Petroleum Oil and Gas Corporation of South Africa (PetroSA) started pumping last week, holds out the possibility of being South Africa’s biggest broad-based black economic empowerment deal yet.
In just over a week PetroSA will start putting together a shortlist of consortiums interested in a 9% slice of its Sable interest, already worth about $14-million (about R105-million).
According to Mmbulaheni Ma-shanyu, PetroSA’s empowerment strategist, the criteria for partnership stipulate that women, the youth, the disabled and the rural poor should be represented by the buyer, and that at least 500 individuals should be enriched in the process.
Sable, 150km south-west of Mossel Bay, is expected to produce between 20-million and 25-million barrels of oil in the next three years. According to Mpumelelo Tshume, chief executive of PetroSA, that would replace about 7% of South Africa’s import requirements for crude oil.
Minister of Minerals and Energy Phumzile Mlambo-Ngcuka said the oilfields off South Africa’s southern coast, including Sable, will produce 17% of the country’s oil needs. She added the hope that the envisaged empowerment deal would be the first step towards creating South Africa’s first oil barons.
PetroSA holds a 60% working interest in and operates the Sable oilfield. Dallas-based partner company Pioneer Natural Resources holds the other 40% working interest. The project, which has an expected lifespan of three to six years, has a budget of $370-million.
Sable is the third oilfield PetroSA has brought into production since 1997. The other two fields, Oribi and Oryx, have together produced 35-million barrels. The company also produces gas off Mossel Bay.
PetroSA was formed in 2001 through the merger of the government’s commercial assets in the petroleum industry, including Mossgas, the world’s largest commercial gas-to-liquids producer at Mossel Bay, and Soekor, the oil and gas exploration and production company. Total revenue for the financial year to end March 2002 amounted to R5,03-billion.
The company’s international expansion has thus far included countries such as Algeria, Libya, Egypt, Gabon, Angola and Nigeria.
It acquired exploration interests in the Themis Marin and Iris Marin blocks that lie in the Southern Gabon Basin. According to independent analysts these contain more than 1,6-billion barrels of recoverable oil.
Economic benefits of the Sable exploration have already cascaded to the local community in the form of upgrading work undertaken on the floating production, storage and offloading oil vessel, the Glas Dowr, in the Cape Town harbour.
The value of the work executed in Cape Town exceeded R300-million, while more than 800 locals were employed during the upgrade.
According to development project manager Frank van Baarsel, more than two million man-hours were expended in the nine months of the upgrade.
South African oil exploration company Energy Africa, which boasts a 20% interest in the Oribi oilfield, announced last week that it has been awarded, through its wholly owned subsidiary Unilon Oil Explorations, interests in six blocks and in one traditional licence in the 21st Seaward Licensing Round on the United Kingdom continental shelf. Drilling was scheduled to start in September.