Cairn India, on Thursday, announced that it had bought 60 per cent interest in a deep-sea gas discovery block on the west coast of South Africa. This is the first overseas acquisition by the company.
In a statement issued here, it said Cairn India signed a farm-in agreement with South African national oil firm Petroleum Oil and Gas Corporation of South Africa Ltd (PetroSA) to take 60 per cent interest in 19,922 sq km Block 1 in the Orange Basin. While the company will not make any upfront payment, it will carry PetroSA during the initial exploration phase (that is, fund the South African firm’s share of cost).
Cairn was awarded a frontier basin block in Sri Lanka where it made gas discoveries in two out of the three wells drilled so far. It is producing 1.75 lakh barrels per day (bpd) of oil from the Rajasthan block where it sees a potential of 3 lakh bpd. Cairn was able to get operatorship of the block along with majority 60 per cent stake. PetroSA had drilled two wells on the block so far, one of which yielded a gas discovery. After the acquisition, the company plans to do a seismic survey in the next weather window and then will drill one well on the block.