Russian firm Rosgeo agrees $400 million gas deal with South Africa’s PetroSA

Russian geological exploration firm Rosgeo has agreed a US$400 million deal with South Africa’s PetroSA which will see the former drill for gas off the coast of South Africa.

The agreement was signed and announced at the ninth annual BRICS summit in Xiamen, China and will involve the development of exploration areas Block 9 and 11a off the Southern coast of the African nation.

“The project envisages extraction of up to 4 million cubic metres of gas daily. This will subsequently be delivered to PetroSA’s gas-to-liquids refinery,” said PetroSA in a statement.

Under the agreement, Rosgeo will use seismic and drilling vessels to carry out more than 4,000km² of 3D seismic operations and over 13,000km² of gravity-magnetic exploration works.

Rosgeo’s intervention represents a chance for PetroSA to revive output from its Mossel Bay refinery, which has been steadily falling in recent years against a backdrop of declining gas reserves.

“The upside for PetroSA is the possible expansion of our depleting gas resources,” said PetroSA chairman Luvo Makasi.

“Discovery of hydrocarbons on our shores has the potential to bring significant revenues to the country and prove the country’s oil and gas prospectivity.”