Shell has completed a deal to enter the Transkei & Algoa exploration right, offshore South Africa, with Impact Oil & Gas.
The South African government has also extended the licence into the second renewal. This started in August 2021 and will run for two years.
During this period, Shell and Impact intend to acquire around 6,000 square km of 3D seismic. They expect to carry out this work in 2022. The two areas under the exploration right cover 45,838 square km.
Impact CEO Siraj Ahmed welcomed the closing of the farm out. “We look forward to working with Shell to build on the considerable work done to date and further explore this exciting exploration province,” he said.
“This transaction, and the proposed 3D seismic acquisition programme, enables Impact to deliver on its objective of accelerating the exploration of the transform margin of the South African Natal Trough, which Impact believes has significant potential.”
Impact holds a 50% stake in the exploration right, while Shell’s BG International has the remaining 50% and the role of operator.
If the government extends the licence into a third renewal, Shell has the option to acquire another 5% from Impact.
The companies announced the deal in November 2020. This came shortly after ExxonMobil and Equinor pulled out of the area.
Speaking at the time to Energy Voice, Ahmed said the company’s hopes in Algoa were based on the Aptian play, as demonstrated in Total’s Brulpadda and Luiperd discoveries. Impact believes there are large submarine fans in the Transkei block, which is northeast of Algoa.