Pioneer Begins Development of Gas Offshore South Africa

Pioneer Natural Resources

Pioneer Natural Resources reports that development activities have begun on its South Coast Gas project offshore South Africa. Pioneer is partnering with PetroSA, the National Oil Company of South Africa, to jointly develop the South Coast gas fields to provide feedstock for PetroSA's onshore gas-to-liquids (GTL) plant in Mossel Bay. Both companies have board approval for the project. Pioneer holds a 45% working interest in the project, and PetroSA has a 55% working interest and is operator.

Since 2003, Pioneer and PetroSA have been producing oil from the Sable field while reinjecting associated gas. The South Coast Gas project will include the subsea tie-back of gas from the Sable field and six additional gas accumulations to the existing production facilities on the F-A platform for transportation via existing pipelines to the GTL plant. Production is expected to begin during the second half of 2007 and increase to an average of approximately 100 million cubic feet per day of gas and 3,000 barrels per day of condensate over the initial phase of the project through 2012.

Engineering plans for subsea systems, pipelines, umbilicals and surface equipment modification are currently being finalized. Development drilling is scheduled to begin in January 2006.

Scott Sheffield, Pioneer's Chairman and CEO, stated, "We're very pleased to get gas development offshore South Africa underway. The South Coast Gas project will provide a growing production profile beginning in 2007 and is a good example of an important component of our strategy for adding value - seeking lower-risk opportunities to develop known oil and gas resources with strong economic returns."


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