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South Africa's PetroSA is in talks to buy assets in Ghana from Sabre Oil and Gas, including a stake in the lucrative Jubilee field, the head of the government-owned oil group said. Under new leadership since March, PetroSA has become more aggressive about new projects, scouting Africa for oil and gas and buying downstream assets to diversify its revenue beyond a gas-to-liquids plant in South Africa.
"We hope to conclude (the Sabre deal) in the near-term future," Nosizwe Nocawe Nokwe told Reuters in an interview, but declined to disclose the potential value of the deal. Nokwe said the group was also in talks with Italian oil major Eni SpA to possibly participate in its offshore Mozambique project, where Eni has made significant gas discoveries expected to turn Mozambique into a key gas exporter.
PetroSA may also participate in the next bidding round for blocks expected in Mozambique towards the end of the year. "In our upstream strategy we are looking at access to near-producing blocks. We are constantly looking at opportunities ... either by acquisitions or bidding for acreage," she said. PetroSA is also in preliminary talks with Mozambique to build a gas-to-liquids plant, which could be supplied by the offshore fields, although Mozambique will have to decide whether to pursue the project or any of the other ventures proposed by investors eager to benefit from its gas and mining boom.
PetroSA's key project at home is the construction of a refinery, which had been delayed for years due to lack of funds, but has gained momentum after a deal with China's Sinopec Group. "This refinery is going to be built," Nokwe said, adding that the government had signaled it as a priority. The refinery is meant to ease a shortage of refined fuel products in South Africa, now at around 100,000 barrels per day, and expected to double by the end of the decade. Nokwe said the output of the refinery was estimated at between 200,000 and 360,000 barrels per day, depending on whether the company decides to supply the domestic market only or become a supplier of products to the region as a whole.
PetroSA hopes to supply 25 percent of South Africa's liquid fuels needs by the end of the decade. The project would be built in partnership, either with Sinopec or another party, with 60 percent of the project funded from debt and the rest coming off the partners' balance sheets.
PetroSA is also waiting to see whether the government will lift a moratorium on shale gas exploration and drilling, with the company eager to participate in that area seen as a game changer for energy-starved South Africa.
It also plans to build an import facility for liquefied natural gas to sustain the life of its Mossel Bay gas-to-liquids plant. "We must have that project up and running by 2018 or thereabout," Nokwe said.
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