Picture: THE TIMES
Picture: THE TIMES

State owned gas-to-liquid company PetroSA has signed a $400m oil and gas agreement with Russian exploration company Rosgeo, the Cabinet said in a statement on Thursday.

The agreement was signed at the Brics Summit was held in Xiamen China from September 3-5 and would "yield an amount of $400 million being invested in the development of SA’s oil and gas sector," the statement said.

National oil company PetroSA and the Russian Federation geological exploration company, Rosgeo, have agreed to develop the exploration areas of blocks 9 and 11a off the south coast of SA.

"The search for oil and gas resources in SA is highly strategic for the country’s energy security. Russia’s Rosgeo will conduct geological exploration work as well as drilling exploratory wells.

"The project could lead to 4-million cubic metres of gas being extracted daily and subsequently delivered to PetroSA’s gas-to-liquids refinery in Mossel Bay, on the south coast."

Trade between SA and Russia have increased from R5bn in 2012 to almost R8bn in 2016. Major South African exports include fruits and nuts, manganese ores, beverages, spirits and vinegar, wine, electrical machinery and equipment.

On the recent spurt in economic growth, the Cabinet was convinced that the country was seeing the first positive signs of what is hopefully the start of the country’s economic recovery.

"The black industrialist programme has supported 62 projects that have attracted R26bn in private-sector investment and created 19,859 jobs to date. To support localisation, 21 products and sectors have been designated for local production.

"Operation Phakisa has so far unlocked an estimated R24.6bn in investment in the oceans economy, with the government contributing R15bn of this amount," the Cabinet said.

"Although the investments are mainly in infrastructure development in ports, marine manufacturing in particular boat-building, aquaculture and scientific surveys in the oil and gas sector, several government departments have made substantial contributions to ensure the growth of this sector. A total of 6,517 jobs had been created in the various sectors," the Cabinet said in the statement.

It said Finance Minister Malusi Gigaba, continued to engage with various sectors on the inclusive economic growth action plan, which is set to inspire confidence in the country. The minister will further unpack this when he delivers the medium-term budget policy statement in Parliament on October 18.

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