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BHP Billiton to drill SA oil Posted: Mon, 10 Apr 2006 [miningmx.com] -- BHP BILLITON, the world’s largest resources company, said it would begin exploring for oil off South Africa’s west coast as soon as a drill rig became available. The group also said it would imminently announce partners that could own as much as 50% in its Namibian oil and gas exploration projects. “Drilling rig availability is the principle risk,” said Andrew Fisher, GM of BHP Billiton’s southern Africa petroleum operations. “We’re pretty much ready to go. We’re hopeful that a drill rig will become available.” BHP Billiton says that the cost of establishing a drill rig is estimated at about $50m. Earlier this year, BHP Billiton said it was waiting for clarity regarding South Africa’s fiscal regime before starting drilling for oil off the west coast. South Africa’s Treasury has been writing legislation for an annual royalty on mining companies operating in this country. The South African government said that details of the proposed Royalty Bill would be made public in May. Details are sketchy at the current time, but it's thought a redrafted bill may make changes in the size of royalties payable by companies on revenues. The oil industry may pay a 1% annual tax on revenue. Fisher said the impending Bill wasn’t a handicap on the group’s oil exploration ambitions. “We’ve complete comfort with the Royalty Bill,” he said. “It’s just the conversion of the exploration licences that we’re waiting for.” Commenting on the so-called Orange River basin, the geological expression that contains potential oil and gas reserves off South Africa’s and Namibia’s coasts, Fisher said: “We’re at the beginning of a frontier exploration programme. The Orange River basin could become a world-class petroleum province with multi-billion dollar projects.” In South African waters, BHP Billiton has the right to explore the 3b and 4b “oil and gas transition” concessions it owns in partnership with Occidental Oil (45%). “Though it’s early days we believe it’s an area similar to the lower Congo basin,” Fisher said. That region was hailed recently as “prolific” by Angola’s state-owned firm Sonangol. BHP Billiton also owns the 3a and 4a concessions off South Africa’s coast that holds possible gas reserves. Sasol, the New York-listed petrochemicals firm, has a 10% interest in the exploration of both concessions. BHP Billiton has the right to explore northern and southern blocks off Namibia’s coast that could also contain potential for liquid natural gas (LNG) exports.Free news alerts: click here to subscribe
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