E&P Companies Explore Offshore Namibia’s Hydrocarbon Potential

Recent giant discoveries offshore West Africa, including the Jubilee discovery offshore Ghana and additional discoveries offshore Angola, have sparked new interest in the West Africa’s Atlantic Margin. Oil and gas companies, including majors BP, Petrobras and Repsol, are testing Namibia’s offshore hydrocarbon potential.

Once a German colony that gained independence from South Africa in 1990, Namibia is well known for its uranium, diamond mines and minerals. Namibia’s largest offshore commercial hydrocarbon discovery to date is the Kudu gas field, which is estimated to hold 1.3 trillion cubic feet (Tcf) of proven reserves and an upside of 20 Tcf. Operator Tullow Oil plans to make an investment decision for Kudu later this year, meaning initial production from Kudu, which could mean the delivery of gas and power generation by the end of 2015, Tullow said in its website.

Companies exploring Namibia believe the country has potentially significant hydrocarbon resources offshore due to its common geological history and similar petroleum systems to that of Brazil, where a number of large pre-salt offshore hydrocarbon discoveries have been made.

Chariot Oil & Gas reported on its website that the same source rocks are present offshore Namibia as in Brazil with respect to depositional sequences, source rock type and oil fingerprinting. Additionally, geochemical analyses of Kudu gas indicates an over-mature oil prone, lacustrine source rock is the origin of the gas. Chariot said in its June 2012 investor presentation that oil may be expected from the same source rocks in areas where maturity is lower.

“Similar source rocks are identified all around the South Atlantic margins with recent discoveries pushing proven areas both north and south from the traditional ‘salt basins’,” according to Chariot’s website.

The company estimates its acreage to hold 19.4 billion barrels of gross mean unrisked prospective resources.

Chariot in July will drill the Kabelijou (2714/6-1 well) to test the Nimrod prospect in the Orange Basin in Southern Block 2714A. Drilling will take place 48 miles (77 kilometers) offshore Namibia in 1,181 feet (360 meters) of water. Chariot plans to drill to a total depth of 10,171 feet (3,100 meters) using Ocean Rig Poseidon (UDW drillship) and estimates drilling will take two months.

Partners in Southern Block 2714A include BP and Petrobras, according to Chariot’s June 2012 investor presentation. Nimrod is estimated to contain gross mean unrisked prospective resources of 4.9 billion barrels of oil, including 1.2 billion barrels net to Chariot.

The company on May 11 reached total depth with the well drilled to test the Tapir South prospect. While the well penetrated excellent reservoirs, no commercial hydrocarbons were found. Chariot plugged and abandoned the well, which was drilled with the Maersk Deliverer (UDW semisub).

“Whilst the results of the Tapir South well are disappointing, this is the first well of a longer term drilling campaign within a frontier region and only the second well ever to have been drilled in the Namibe Basin,” said Chariot CEO Paul Welch in a May 14 statement.

“Our understanding of this basin is rapidly improving and we expect this well to provide more information on the character and maturity of the potential source rocks when we carry out detailed analyses on the recovered samples,” Welch commented.

BP Farms Into Serica’s Luderitz Blocks

In March 2012, Serica Energy reported that BP would farm into Serica’s interest in four full and partial blocks in Namibia’s offshore Luderitz Basin by fully funding a 3D seismic survey that would cover up to 1,602 square miles (4,150 square kilometers).

BP would earn a 30 percent interest through this agreement, and has the option to acquire an additional 37.5 percent interest in the license by drilling and testing a well. BP will farm into Blocks 2512A, 2513A, 2513B and 2162A, which encompass 6,718 square miles (17,400 square kilometers) in the deepwater central Luderitz Basin.

“In Namibia, we recognize the benefits of having a partner who brings technical and development expertise to the group to complement Serica’s early stage exploration capability,” said Serica Chairman and Interim Chief Executive Tony Craven Walker in a March 15 statement.

Walker said the company was pleased with the progress of seismic survey, which began in April and is one of the largest undertaken offshore Namibia, and expects results later this year.

Data acquired so far has been of good quality and is expected to fully delineate a number of significant prospects which have already been identified on the license.

“Offshore Namibia remains one of the few under-explored regions worldwide with very large resource potential,” Walker said in a statement. “With the rapid build up of operations Serica has demonstrated its ability as an operator and its commitment to Namibia.”

Besides Chariot and Serica, companies active offshore Namibia include Tower Resources, Arcadia Petroleum, HRT Oil & Gas, Energulf, and Eco Oil & Gas.

Tower Resources said on June 6 that Repsol was planning to enter Namibian offshore license 0010 as operator and take a 44 percent working interest. Tower holds a 15 percent interest in the license, and Arcadia Petroleum holds 85 percent interest.

The companies plan to spud an exploration well at the Delta prospect in the Walvis Basin in 2013 subject to farm-out. Delta is estimated to hold approximately 9.3 billion barrels of recoverable oil and 14.5 Tcf of gas.

Tower said in its June 2012 investor presentation that it was considering options to increase its Namibian exposure.

HRT Oil & Gas will begin drilling offshore Namibia late this year or in early 2013, Reuters reported on May 14. The company estimates it has 28 billion barrels of potential oil and natural gas resources in the African country, Bloomberg reported on May 23.

Eco Atlantic, an oil and gas exploration company with acreage offshore and onshore Namibia, estimates that its three offshore licenses, which cover more than 9,652 square miles (25,000 square kilometers), has an estimated resource potential of approximately 18 billion barrels, according to a presentation on the company’s website. The company will begin a 3D seismic survey of its offshore licenses later this year.

The company said in its June 2012 investor presentation that Namibia’s license and royalty regimes are one of the “best” and “straightforward” among oil exploration and production countries, and the country is among the most economically and politically stable countries in Africa.