South Africa has granted Royal Dutch Shell, the Anglo-Dutch oil group, a licence to explore for oil and gas in the Orange Basin off the country’s west coast, the company said on Friday.
South African petroleum authorities had confirmed in 2009 that Shell was the successful bidder for exploration rights in the area and that a contract would be negotiated.
“The deep-water portion of the Orange Basin has evidence of source rocks that have the potential for significant commercial oil and gas discoveries, although it is as yet largely unexplored,” Shell said in a statement on Friday.
The company holds 100% of the licence and will invest between $15m and $25m to explore in the basin over the next three years, it added.
The exploration area covers just more than 37000 square kilometres, roughly the size of the Netherlands.
It is located in water between 500m and 4km deep and has so far seen limited exploration activity.
Shell has been active in retail in South Africa since 1904 and in refining since 1963. This is the first time it will be involved in exploring for oil and gas in the country.
