Privately-owned exploration company Impact Oil & Gas has entered into an agreement with Shell for the farm-out of a 50 per cent working interest and operatorship in the Transkei & Algoa blocks, offshore South Africa.
In a statement on Wednesday, Impact said that Shell has also been granted the option to acquire an additional 5 per cent working interest should the joint venture elect to move into the third renewal period.
This renewal period is expected to be approximately in 2024.
Siraj Ahmed , CEO of Impact Oil & Gas, commented: “We are delighted to have secured a farm-out partner of Shell’s calibre, highlighting the significant value potential of our exceptional South African exploration portfolio.
“Shell joins the Transkei & Algoa licence at a very exciting time for exploration drilling in South Africa. They bring substantial exploration expertise, with particular understanding of the potential of offshore South Africa, and an agreed strategy to accelerate the work program to build upon the considerable work already undertaken by Impact and the previous JV partnership”.
Whilst part of the same licence, the Transkei & Algoa blocks have different geological settings.
The Algoa block is situated in the South Outeniqua Basin, a short distance east of Block 11B/12B, containing the Brulpadda gas condensate discovery and where Total has recently announced a further significant gas condensate discovery, following the successful drilling of the Luiperd-1X exploration well , which it is currently testing.
The Transkei block is situated north-east of Algoa in the Natal Trough Basin where Impact has identified highly material prospectivity associated with several large submarine fan bodies, which this joint venture will explore with focused 3D seismic data and then potential exploratory drilling.
Impact and Shell plan to acquire over 6,000km² of 3D seismic data during the first available seismic window following completion of the transaction. This window is expected to be in the first quarter of 2022.
Closing of the transaction is subject to customary conditions, including the approval of the Government of South Africa.
Following the completion of the farm-out deal, Shell and Impact will each have a 50 per cent interest in the two offshore blocks with Shell as the operator.