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Eco Atlantic farms into South Africa’s Block 1 amid slate of Orange Basin discoveries

Eco Atlantic farms into South Africa’s Block 1 amid slate of Orange Basin discoveries

Oil and gas exploration company Eco Atlantic – through its wholly-owned subsidiary Azinam South Africa, has signed a farm-in deal with energy company Tosaco Energy for a 75% working interest in Block 1 – located in the South African part of the offshore Orange Basin.

Eco Atlantic has assumed operatorship of the block, with the remaining 25% stake expected to be transferred to South African company Orange Basin Oil & Gas. Upon completion of the transaction, Eco Atlantic will assume control of one of the largest blocks in the Orange Basin.

The African Energy Chamber (AEC)  believes that this transaction is only the start of a wave of Orange Basin deals in the coming years. Having revealed substantial deposits in neighboring Namibia, the basin stands to play a catalyzing role in driving energy security in South Africa.

The strategic acquisition is on trend with a strong lineup of companies looking at tapping into the Orange Basin. Since play-opening discoveries were made by Shell, TotalEnergies, and Qatar Energy in 2022, over 15 finds have been made by an assortment of majors and independents. In February 2024, TotalEnergies intersected hydrocarbon-bearing intervals in the Mangetti-1X exploration well in Block 2913B,  marking the second discovery by the company in the basin. TotalEnergies is currently leveraging the Tungsten Explorer drillship to assess reserves available at the well. The discovery followed the company’s Venus-1X find made in February 2022. Research firm Wood Mackenzie estimates that Venus alone could hold as much as three billion barrels of oil – making it sub-Saharan Africa’s largest oil discovery.

Additionally, in January 2024, multinational energy corporation Galp made its second oil discovery at the Mopane-1X well in PEL 83. Preliminary estimates place over 10 billion barrels of oil at the Mopane field. The company is currently seeking a farm-in partner to develop the block, with a 40% stake in the Mopane discovery up for grabs. Meanwhile, Shell continues to witness a string of success with its recent Lesedi-1X well – discovered in July 2023 – representing the fourth commercial discovery made by the firm in the Orange Basin. Other finds – namely, Graff-1X, La Rona, and Jonker-1X – may hold as much as 1.7 billion barrels combined. Shell is currently undertaking an extensive drilling campaign, with up to 25% of the company’s 2023-2024 exploration budget directed to deepwater exploration in the Orange Basin.

These discoveries underscore the size and potential of the Orange Basin, with substantial deposits likely extending into South Africa. Block 1 is located on the maritime border of South Africa and Namibia, close to blocks held by Shell, Galp, and TotalEnergies. The block is also situated near the Kudu Development Project – Namibia’s inaugural natural gas project with 1.3 trillion cubic feet of reserves. Kudu is poised to be a game-changer for the country, providing low-cost power and fuel while laying the foundation for gas-driven economic growth. As such, Block 1’s proximity means that the asset could likely yield similar developments and the Eco Atlantic  acquisition is only the first step to realize this goal.

“The Orange Basin has emerged as one of the most promising offshore plays worldwide in recent years. Exploratory success on the Namibian side of the basin shows strong potential for the South African side, and while exploration in this area has been slow to date, the recent farm-in by Eco Atlantic is poised to reverse this trend. The AEC has long advocated for the need to advance drilling efforts in Africa and the Orange Basin stands to play a transformative role in the region’s energy landscape,” stated NJ Ayuk, Executive Chairman of the AEC.


 

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