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Total E&P South Africa (Tepsa), a local arm of French multinational Total, and its partner Canadian Natural Resources International, have begun drilling for oil about 180km south of Mossel Bay. Tepsa holds the exploration rights to conduct seismic surveys, exploration and drilling in the block in the Southern Outeniqua basin. The exploration well will be called Brulpadda-1AX.

This is the first drilling operation off South Africa and this programme, expected to take about four months, will be closely watched by the country’s government and the oil an d gas industry globally.

Drilling is expected to reach a depth of 3500m in 1500m of water.

South Africa’s Mineral Resources Minister, Ngoako Ramatlhodi, recently indicated that legislation for the oil and gas industry should be separated from that of the mining industry. The amendments to the Mineral and Petroleum Resources Development Act were passed by Parliament in February, but President Jacob Zuma has yet to sign them into law. The bill will allow the government to have a 20% free carry stake in new oil and gas projects and an option to acquire a further stake at market-related prices.


According to PricewaterhouseCoopers, which released its fourth annual Africa Oil and Gas Review this month, oil and gas companies in Africa believe raising equity will be easier than it has been in the past two years because of increased interest in the region and the fact that substantial gas discoveries have been made offshore Tanzania and Mozambique. The biggest source of funding for exploration and production companies is expected to be internally generated cash with farm-outs the second-most common form of financing. Last year about 100 farm-out deals were signed including a deal between Sasol and the Italian multinational Eni on its licence block in the Durban and Zululand basins, where Eni will take a 40% interest and become the operator. Sasol retains 60% interest.