Shell may drill $200 million well off South Africa next year

Shell may drill $200 million well off South Africa next year

BY PAUL BURKHARDT

JOHANNESBURG (Bloomberg) -- Royal Dutch Shell may drill off South Africa’s northwest coast next year after studying seismic data from the area. The company acquired 8,000 sq km of 3D seismic data in the Orange Basin, Shell South Africa General Manager Jan Willem Eggink said in an interview in Johannesburg. The seismic data are being processed and should be ready by December, he said.

Shell has started an environmental impact study “so that if we will go ahead to drill a well we will be ready,” he said. The timing of a prospect well would be due to rig availability and the weather window, Eggink said. The cost of each well would be $150 million to $200 million because of the deep water.

South Africa had proven oil reserves of 15 MMbbl in January 2011, located to the south and off the west coast near the Namibian border. The country, isolated from foreign investment until apartheid ended in 1994, has no “significant” crude output, according to the United States Energy Information Administration.

Shell’s area is close to the border of Namibia in water ranging from 500 m to 3,000 m in depth, according to Eggink.