American billionaire backs drilling off SA’s west coast – targeting 349 million barrels of oil
- Offshore drilling of the highly anticipated Gazania-1 site is expected to begin later this year.
- The proposed well, situated off South Africa’s west coast near the small fishing village of Hondeklip Bay, is expected to hold 349 million barrels of oil.
- The area’s potential stretches back to initial drills and tests conducted in 1988.
- Now, with backing from mining tycoon Robert Friedland and government approval, Gazania-1 “represents a significant opportunity for South Africa”.
- For more stories go to www.BusinessInsider.co.za.
Drilling into an oil-rich well, located off South Africa’s west coast, is expected to begin before the end of the year.
This follows after government confirmed Azinam South Africa, backed by American-Canadian mining tycoon Robert Friedland, as the operator of lucrative Block 2B.
Situated roughly 300 kilometres north of Cape Town, just offshore from the small west coast fishing village of Hondeklip Bay, lies Block 2B. Covering an area of 3,062 square kilometres, oil was first discovered here by the Southern Oil Exploration Corporation (Soekor) in 1988.
Drilling into the thick sandstone at depths of up to 3,350 metres, tests conducted on Soeker’s A-J1 borehole showed a flow of 191 barrels of oil per day. Subsequent exploration of Block 2B, in the shallower vicinity of AJ-1, revealed the potential of Gazania-1 which is estimated to contain 349 million barrels of recoverable oil.
On Monday, Africa Energy, an oil and gas company with local offshore exploration assets, confirmed that a farmout deal signed in 2020 had been approved by the South African government. The deal sees Azinam become the operator and 50% licence holder in Block 2B.
“This transaction will allow for a well to be drilled to test the wider potential of the A-J1 discovery. Azinam and partners are targeting 349 million barrels of oil,” explains Daniel McKeown, the Managing Director of Azinam, with reference to other minority participating interest holders, Africa Energy (27.5%), Panoro Energy (12.5%) and Crown Energy AB (10%).
Azinam South Africa is backed by a global exploration investment company, Seapulse, which was co-founded by Seacrest Capital Group and I-Pulse in 2018. Co-founder and chairman of I-Pulse, Friedland, noted that the successful development of Block 2B had the potential to provide South Africa with “much-needed energy”.
Friedland, founder and chairman of Ivanhoe Mines, which has a vested interest in South African minerals through its subsidiary, Ivanplats, is estimated to be worth $1.8 billion (R25.7 billion). Ivanhoe Mines indirectly owns 64% of the Platreef Project located near Mokopane in Limpopo.
The project, which has been subjected to thorough feasibility studies and economic assessments in 2020, targets palladium, platinum, rhodium, nickel, copper, and gold.
With capital and project management capacity supplied by Seapulse, Azinam hopes to drill into Gazania-1 towards the end of 2021. The initial spudding process refers to drilling into the seafloor.
“With the benefit of new 3D seismic, we can see that A-J1 drilled the down-dip section of a potentially much larger oil accumulation in a number of reservoirs,” says Paul Murray, the Director of Azinam Group.
“Confirmation of a significant oil field on Block 2B, in a benign ocean setting and close to shore, represents a significant opportunity for South Africa and the Block 2B licence holders to deliver the first major oil production offshore South Africa.”
Africa Energy anticipates that it will cost approximately $21 million (R300 million) to drill the Gazania-1 well in the third quarter of 2021.
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