South Africa has the second largest economy on the African continent, but it is not a major oil producer. It does have a very large coal industry, as well as sizable natural gas production. But for liquid fuels, it has been largely dependent on Middle Eastern and West African imports.
Import dependence has also led to a relatively sophisticated synthetic fuel industry. About 90 percent of the country’s domestic consumption comes from coal-to-liquids and natural gas-based synthetic fuels.
Prior estimates peg South Africa’s oil reserves at just 15 million barrels. However, several companies are exploring off South Africa’s coast, on the premise that those figures underestimate what truly lies beneath.
Statoil (NYSE: STO) announced at the end of October that it was farming into an operation with an ExxonMobil (NYSE: XOM) subsidiary in South Africa. The agreement gave the Norwegian firm a 35 percent stake in a project in the Tugela South block. ExxonMobil controls 40 percent of the venture, and Impact Africa Ltd. controls the remaining 25 percent.
The foray into South Africa is a first for Statoil. The venture will conduct 3D seismic surveying over the next two years, and the data gleaned from the surveys will inform the companies’ next steps. “It represents access into a frontier basin where we believe we see indications of an active petroleum system and which has impact potential,” regional vice president…