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Assessing and promoting civil and minority rights in South Africa.

[Source: Reuters by Wendell Roelf & Vladimir Soldatkin.]

South Africa’s national oil company PetroSA and Russia’s state geological company Rosgeologia are in talks to finalize a $359 million farmout deal to give Russia its first foothold in a prospective oil and gas field offshore South Africa, three sources said.

PetroSA is under pressure to boost dwindling domestic resources that have imperiled its flagship Mossel Bay gas-to-liquid refinery, which is operating well below capacity. The company is hoping the tie-up with Rosgeologia (Rosgeo) and other partners, including Norway’s Equinor (EQNR.OL), will accelerate exploration in acreage it holds.

Farmout deals, which are commonplace in the global petroleum industry, see a license holding party give another party a percentage of that license in exchange for services – in this case paying for exploration drilling which can cost around $50 million a well.

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South Africa at a Glance
58 780 000 (mid 2019 estimate)
3.6% y/y in November 2019 (CPI) & +2.3 y/y in November 2019 (PPI)
-0.6% q/q (3rd quarter of 2019)
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