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Sunbird's Ibhubesi licence transfer approved

Sunbird Energy MD Will Barker discusses the latest developments at the company's Ibhubesi project. Video courtesy of Sunbird Energy.

9th October 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The South African government has approved the transfer of an offshore licence, which includes the Ibhubesi gas project, to ASX-listed Sunbird Energy.

The approval allows Sunbird to acquire a 76% interest in the production licence from Forest Oil and Anschutz Corporation. South Africa’s national oil company, PetroSA, holds the balance.

Sunbird chairperson Kerwin Rana commented that the approval represented a critical milestone for the company, consolidating its position as the operator of what is described as South Africa’s largest and most advanced undeveloped gas field.

“The transfer allows us to now focus on securing a gas market, which will further unlock the significant value of the project’s proven reserve base and large exploration potential. On our current economic modelling of the 2P reserve base, the project has a potential net present value of over $1-billion.”

Rana stated that the company was advancing two key routes to market for the project, which included a supply to electricity producer Eskom and an independent power plant tender for a new 474 MW gas-fired facility.

Sunbird had also started field development planning as part of the front-end engineering and design phase, which would enable the project to reach a final investment decision by early 2015.

The initial phase of the project, which  is located 380 km north of Cape Town and 105 km offshore, could involve an investment of between R12-billion and R14-billion to produce 28.3-billion cubic feet of gas yearly over an initial six- to eight-year horizon.

In August, Sunbird secured funding from the US Trade and Development Agency for Ibhubesi. The US foreign assistance agency will provide 80% of the funding for a A$1-million work programme, which US-based consultants MHA Petroleum will undertake.

Edited by Creamer Media Reporter

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