Exploration Right Awarded in Orange Basin Offshore South Africa
Feb 10, 2012
CAPE TOWN – February 10, 2012 – The Minister of Mineral Resources has awarded Shell South Africa Upstream B.V. an exploration right in the Orange Basin Deep Water area off the north-west coast of South Africa.
The exploration area covers just over 37,000 square kilometres and is located approximately 150 kilometres to 350 kilometres offshore in water depths between 500 meters and 3,500 meters. So far, there has been limited exploration activity in the area.
“I am delighted that we have been granted exploration rights offshore South Africa” said Bonang Mohale, Chairman & Country General Manager: Commercial, Shell South Africa. “The Orange Basin offers an exploration opportunity ideally suited to the application of Shell’s proven deep-water technology.”
In the first three years of the right, Shell will conduct studies and collect seismic data to evaluate the basin and determine whether there is the possibility of hydrocarbons being present. Further exploration activities will be determined by results from this activity. The deep-water portion of the Orange Basin has evidence of source rocks which have the potential for significant commercial oil and gas discoveries, although it is as yet largely unexplored and it may be some years before the potential will be apparent. Any discoveries would be assessed for potential development to the benefit of both the country and its people.
Shell will, as part of the Mineral and Petroleum Resources development framework in South Africa, make a contribution to the Upstream Training Trust, pay its annual exploration fees to Petroleum Agency SA and provide a financial provision for environmental rehabilitation in accordance with applicable regulations.
Shell South Africa Upstream B.V. holds 100% of the license.
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Note to Editors
Shell is committed to a minimum financial obligation of USD 15-25 million in developing this exploration right. This will include:
- 2D seismic acquisition and interpretation
- Contribution of USD 100k (per exploration period) to the Upstream Training Trust*
- Annual exploration fees of around USD 500-750k
- Provision of a financial guarantee for environmental rehabilitation (initially USD 7.9 million, increasing in line with Ministerial advice)
No signature bonus or other upfront fees are payable by Shell.
*In South Africa, each Exploration Right Holder makes a payment towards the Upstream Training Trust. The funds are directed to up-grading teaching and to providing support to previously disadvantaged students at tertiary education institutions.
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