JOHANNESBURG (Reuters) - South African state-owned oil firm PetroSA and U.S.-listed Anadarko Petroleum Corp (APC.N) have signed a deal for oil and gas exploration in blocks off the coast of South Africa, the companies said on Friday.
Under the farm-in deal, whose value was not disclosed, Anadarko will hold an 80 percent stake in Block 5/6 and Block 7 and will serve as operator, and PetroSA will hold the rest.
Under a farm-in agreement, a company buys an interest from another in an existing field, often to help finance development.
Ian Cooling, executive vice president at Anadarko, said the company was interested in South Africa because it was looking for frontier acreage and a country where there was potential to grow a business if the exploration work proved successful.
“We think that South Africa provides all of that,” he said at the signing ceremony.
He did not elaborate on how much Anadarko was planning to invest in the first, three-year-long phase of the exploration work.
“Basically, if the potential is there, we will spend money,” he said.
Explorers in South Africa’s offshore areas have had limited success, despite more promising finds along the coast of neighboring Namibia and Mozambique, but South Africa is seen to hold good potential for shale gas and coal bed methane exploration onshore.
Anadarko, along with other global players, has been very successful in exploration off the coast of Mozambique and the east African nation is now expected to become a major exporter of liquefied natural gas by the end of this decade.
PetroSA’s Chief Executive Nosizwe Nocawe Nokwe and Anadarko’s Cooling declined to say if their partnership could possibly lead to PetroSA also participating in Anadarko’s Mozambican acreage.
“When we finish the initial work (in Mozambique), we may be looking to farm down (sell a stake), but that’s in the future,” Cooling said.
The Anadarko deal is part of PetroSA’s strategy to go into partnerships with global players to expedite work in its blocks.
Earlier this week, the South African oil group signed a farm-in deal for crude oil and natural gas exploration in Block 1 with Cairn India Group (CAIL.NS).
Reporting by Agnieszka Flak; Editing by Nina Chestney