The colossus of the Cape Town empowerment sector - Hosken Consolidated Investments (HCI) – is hoping to make a big impact on the burgeoning African oil and gas sector. Last month HCI – via subsidiary Deepkloof – snapped up a 13% stake in Impact Oil and Gas (IOG) for around R180m.
It seems HCI has already greased the path to a bigger stake in IOG with an agreement being put in place to secure another 7% of the exploration company for around R90m. This will give HCI an influential stake of 20%in IOG. TodateHCI has shown no interest in the oil and gas sector, but the company does have existing ‘energy’ interests in form of its coal mining interests and a controlling stake in Montauk (which extracts natural gas from waste sites.)
IOG is a fairly newcontender in the African oil and gas sector. The company was formed in 2009 by a group of experienced geoscientists that targeted a number of areas off the coast of South Africa which had very large hydrocarbon potential. IOG’s business model is interesting in that the company has no pretentious at being a producer. Instead IOG aims to secure petroleum exploration licences in deep water, and then enhance the value of the licence before ‘farming’ it out to larger oil companies that have the technical and financial capacity to take the projects to the drilling stage. Significantly IOG has already entered into a partnership with oil giant ExxonMobil, and the two companies are currently working together on a substantial exploration program off the coast of South Africa. One of the licences is the Western Bredasdorp Basin off Cape Agulhas. This licence consists of six blocks and covers over 14 000km2 in the western extent of the Bredasdorp Basin. To the east of the licence lies the well-known Sable oilfield (operated by PetroSA,) which has produced 25 million barrels of oil.
IOG’s acreage is reckoned to have significant hydrocarbon potential, and the company is currently studying the extensive inventory of data from the area to determine thebestmethods for further exploration. An application has been lodged to convert the licence to an Exploration Right with ExxonMobil as assigned operator.All inall the IOGdeal looks like a slickly timed move by HCI.
By Jenni McCann