Namibia’s hopes to strike oil renewed

Shell starts drilling offshore Namibia
Otis Daniels_Finck
Swakopmund ∙ [email protected]

Shell oil and gas company started drilling offshore Namibia on 8 December.

The latest exploration exercise once again raised hopes that Namibia might soon add another commercially viable gas or oil source to its Kudu Gas project.

The area, known as block 2913A, is situated in Namibia’s ‘Orange Basin’ and drilling is being done with the Valaris DS-10 rig in waters 2 000 metres deep.

The Kudu gas field is located northeast of this area.

Shell Namibia is operating the well and QatarEnergy is involved. The two share a 90% stake, while the Namibian state-owned National Petroleum Corporation of Namibia (Namcor) has a 10% stake.

According to Petrus Robert, a geoscientist at the Ministry of Mines’ directorate of petroleum affairs, Total Energy is also drilling in the same vicinity.

He told Erongo that with the current drilling happening in the Orange Basin by the two companies, Namibia hopes to announce further discoveries for the country.

Currently, there are 26 active Petroleum Exploration Licenses (PEL) and one Petroleum Production License (PPL) offshore Namibia. PELs are spread across the offshore basins, and the PPL, which refers to the Kudu License, is situated within the “prolific” Orange Basin (south-west offshore Namibia), explained Robert.

There are four basins along the Namibian coast namely from North to South: Namibe basin, Walvis basin, Lüderitz basin and Orange basin where the current drilling is taking place. Each basin has its own different play types specific to that basin.

Due to technological constraints within the oil and gas industry, the deepest areas independent oil and gas companies tend to explore in water depths up to about 3 000m.

He said there are about 14 companies carrying out exploration activities offshore Namibia currently.

“As a country, we are fully aware and realize the energy deficit that is currently being experienced in Namibia, in the region, and in Africa as a whole. Our target is to maximise Namibia’s value generation for the benefit of all her people. International oil companies choose to invest in Namibia because it’s a country with favourable fiscal terms, extensive data coverage, proven resources (both oil and gas) and abundance of plays with material prospects across all the basins,” he explained.

To date, the only commercial discovery in Namibia is the Kudu Gas field which was discovered by Chevron in 1974.

“There was another non-commercial discovery made within the Walvis Basin to the north whereby a sample of light API oil was found in the Wingat-1 well drilled by HRT back in 2013. This created much excitement within the industry and saw many oil and gas companies wanting to invest in Namibia,” said Robert. “If the exploration efforts continue, hopefully, one day we can have another oil or gas discovery.”

A commercial discovery will increase state income through license block rentals (in the form of license application fees and annual rental fees) and payment of direct and indirect taxes, which will, in turn, create employment and will accelerate local skills development thus improving economic growth. Continued prospecting also enhances the geological understanding of the basin.

The Namibian government is the custodian of all-natural resources, and the Ministry of Mines and Energy is the regulator of the oil and gas industry in Namibia. Their role is to ensure that exploration activities are carried out sustainably and in a compliant manner with the existing laws and best industry practices.

“We have strict environmental protection policies and as a country, we can sustainably develop our natural resources whilst safeguarding the contributions to the climate change impact. The legislative framework governing the Namibian upstream petroleum industry is modern and well developed and has been specifically formulated for the international oil and gas industry,” said Robert.

As for Namcor, the state-owned enterprise has a minimum of a 10% equity in all petroleum exploration licenses issued in Namibia.

“In partnership with international oil companies, we explore for oil and gas resources both onshore and offshore Namibia, which will have a favourable impact on the Namibian economy. This will put Namibia in a position of strength becoming a world player in the industry,” Namcor spokesperson Utaara Hoveka told Erongo.

The publication reached out to Shell Namibia’s country manager Dennis Zekveld for further details, but he did not return the calls or messages.