Shell's Potential Expansion in South Africa's Orange Basin

Shell is positioned to increase its presence in South Africa's Orange Basin by acquiring a majority operating interest in Block 2C, currently operated by the state-owned company PetroSA. This move would add to Shell's existing portfolio in the region, where it already operates the Northern Cape Ultra Deep and 5/6/7 blocks in South African waters, as well as PEL 39 in neighboring Namibia.

Terms of the Proposed Farm-In Agreement

According to reports, PetroSA has approved a farm-in deal that would grant Shell a 60% operating stake in Block 2C, reducing PetroSA's holding to 40%. The agreement, pending regulatory approval, stipulates that Shell would pay a $25 million signature bonus and fully finance an exploration program estimated to cost between $135 million and $150 million, which includes drilling three wells.

Official Responses and Current Status

Shell has declined to comment specifically on the opportunity, citing commercial sensitivities, but stated it continuously evaluates portfolio options for growth. The South African National Petroleum Company, the entity that now incorporates PetroSA, has been approached for comment regarding the proposed deal.