Cairn takes 60% interest in South Africa gas block

Cairn India said on Thursday that it has made its first overseas acquisition by taking 60 per cent interest in a deep-sea gas discovery block on the west coast of South Africa.

Cairn 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 the 19,922 sq km Block 1 in the Orange Basin, the company said in a statement here. Cairn was able to get operatorship of the block along with majority 60 per cent stake.

Cairn India will hold a 60 per cent interest in the block, through a wholly-owned South African subsidiary, and will be the Operator, with PetroSA holding the remaining interest
While the company will not make any upfront payment, it will carry PetroSA during the initial exploration phase (fund the South African firm's share of cost). After the acquisition, the company plans to do a seismic survey before drilling a well on the block.

Cairn said Block 1 is in initial stages of exploration. It has an existing gas discovery and identified oil and gas leads. The block is located in the Orange Basin along the north-western maritime border of South Africa with Namibia.