In its first overseas acquisition, Cairn India today said it has bought a 60 percent interest in a gas discovery block on the west coast of South Africa.
Cairn signed a farm-in agreement with Petroleum Oil and Gas Corporation of South Africa Ltd (PetroSA) to take 60 percent interest in 19,922 square kilometre Block 1 in the Orange Basin on the west coast of South Africa.
"The closure of the transaction is subject to South African regulatory approvals," the company said in a statement.
It, however, did not provide financial details of the acquisition.
Cairn said Block 1 is currently in the initial stages of exploration. It has an existing gas discovery and identified oil and gas leads and prospects.
Located in the geologically-proven Orange Basin along the north-western maritime border of South Africa with Namibia, the block is on trend with the discovered Kudu and Ibhubesi gas fields.
"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," the statement said.
The acquisition, it said, is "a step forward in achieving Cairn India's strategic goal of growing its resource base by acquiring exploration and appraisal assets outside the Indian sub-continent."
The Orange Basin is an emerging hydrocarbon province with potential for material oil and gas discoveries. Block 1 will be an anchor exploration asset in South Africa and will augment Cairn India's existing portfolio.
Everton September, PetroSA Vice President for New Ventures, said: "Cairn India brings with it extensive geo-technical and operating capabilities that will combine very well with our experience and understanding of the region. We have a shared mindset, and together are extremely well placed to realise the full potential of Block 1."
P Elango, Cairn India Director for Strategy said: "This is an important first step for the company's growth beyond the Indian sub-continent. We see an attractive opportunity to leverage our capabilities in a rapidly-emerging area and aspire to build a wider business in the region."
Block 1 is a large block of 19,922 square kilometre, with water depths ranging from 100 meters to 900 meters, and is located in the Orange Basin on the north western border between South Africa and Namibia.
The Orange Basin is a large Cretaceous Deltaic Basin with multiple proven source rocks and is lightly explored. PetroSA acquired a 1500 sq km 3D seismic survey in 2009.