A Shell petrol station
Photograph by: JOSHUA LOTT
Credit: REUTERS

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Shell and government would now negotiate the details of an exploration contract, the company said in a statement today.

The exploration area covered about 37,000 square kilometres.

It was located in water between 500m and 4,000m deep and had so far seen limited exploration activity.

"The Orange Basin offers an exciting frontier exploration opportunity to apply the deep water technical ability we have built up around the world over the past three decades," Shell executive vice president for international exploration Ceri Powell said.

Shell had been active in retail in South Africa since 1904 and in refining since 1963. This was the first time Shell would be involved in exploring for oil and gas in South Africa.