Azinam and Panoro take interest in Africa Energy’s offshore reserve

26 February 2020 (Last Updated February 26th, 2020 13:49)

Namibian oil and gas exploration firm Azinam has announced it will operate the South African A-J1 oil discovery, previously held by Africa Energy. Panoro Energy will also take a share of the block.

Azinam and Panoro take interest in Africa Energy’s offshore reserve
Azinam will operate the prospect where Panoro Energy has taken a share of equity. Credit: Panoro Energy.

Namibian oil and gas exploration firm Azinam has announced it will operate the South African A-J1 oil discovery, previously held by Africa Energy. London-headquartered Panoro Energy will also take a share of the block.

The AJ-1 reserve lies in Block 2B off South Africa’s west coast. The block is 300km north of Cape Town in the Orange Basin, with water depths ranging from 50 to 200 meters over its 3,604km2 area.

Africa Energy owned 90% of the block, with the remainder held by Crown Energy. Under two separate agreements, it has farmed out a 50% stake to Azinam, who will become the operator of the block. At the same time, Panoro will buy a 12.5% share.

The reserve contains 349 million barrels of oil, with a tested flow of 191 barrels per day. Azinam plans to drill a well up-dip of the discovery later this year.

Recent 3D seismic data has identified significant potential in six prospect areas at depths of up to 800m shallower than the original well.

Panoro said the next proposed exploration well, Gazania-1, will be drilled into the Gazania and Namaqualand prospects.

Azinam managing director Daniel McKeown said: “With A-J1 having flowed oil to surface and with the benefit of a significant database of well and seismic information, Azinam believes that Block 2B has the potential to provide South Africa with its first major offshore oil production.

McKeown said: “In 1988 the A-J1 well offshore South Africa encountered significant quantities of oil in 150m water depth and only 25km from shore. With the benefit of new 3D seismic, we can see that A-J1 drilled the down-dip section of a potentially much larger oil accumulation in a number of prospects.”

Azinam entered the Orange Basin in 2018 taking stakes in Block 3B/4B and Nearshore Block 3B/4B, under an agreement with Ricocure.

Panoro holds exploration and production assets in Africa with oil production from fields in Tunisia, Gabon and Nigeria.

Panoro CEO John Hamilton said: “This farm-in to Block 2B is in line with Panoro’s renewed strategy of acquiring minority high-impact exploration interests close to existing discoveries and with clear routes to commercialisation.”