Oil and Natural Gas in Namibia

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Exploration History

The initial offshore exploration phase took place from the late 1960’s to the early 1970’s and one well was drilled during this time, Kudu 9A-1, which was the discovery well for the giant Kudu gas field. No further exploration for hydrocarbons was done by international operators until after Namibia became independent in 1990. In 1987-1988 Swakor, the predecessor company of the present National Oil Company (NAMCOR), drilled a further 2 wells in the Kudu field. The Kudu-2 well was not tested but Kudu-3 proved the existence of a major gas field. The proven hydrocarbons were an asset in Namibia’s first licensing round.

The first exploration licensing round was held in 1991-1992 with five licenses being awarded at this time, the operators of these being Norsk Hydro, Ranger, Sasol, Chevron and Shell. The second round in 1995 resulted in 2 new licences being awarded, both to Shell. One of these was an extension to the existing license that Shell had over the Kudu field. As a result of these licence awards over 28,000 km of 2-d seismic was acquired in addition to the 60,000 km of multi-client data, which is available. The Third Licensing Round in 1998-99 resulted in no applications being received, partly because of the low oil price at the time as well as the numerous international company mergers that were ongoing. The mini-4th Round in 2004 eventually resulted in the award of 2 blocks to BHP-Billiton west and south of Kudu.

To date 14 wells have been drilled off shore Namibia, including 7 in the Kudu gas field. In addition data is available from DSDP and ODP wells and also academic seismic data from earlier work. The data that has resulted is a modern, comprehensive and digital set that is easily accessible. In June 2000 a license was awarded in northern Namibia to Vanco Energy. In 2002 Shell withdrew from the Kudu Block and the license was taken over by the then partners, Chevron, Texaco and Energy Africa. Recently many other licences have been awarded for exploration both onshore and offshore Namibia. The map shows all of the current licences in Namibia.

In addition to the seismic data NAMCOR acquired 28,000 km of aeromagnetic data in 1998 covering the whole of offshore Namibia. This data set has elucidated the structural setting of the Namibian margin, especially when used in conjunction with the regional and high-resolution data from onshore Namibia.

• Natural gas proved reserves: 62.3 billion cu m (1 January 2005 est.)

Source: Tullow Oil

• Tullow Oil plc holds an operating interest in Production Licence 001 over the Kudu gas field, offshore Namibia. In July 2004 Tullow concluded a Joint Development Agreement for the development of the field as part of a gas-to-power project. The project involves the development of the Kudu gas field by Tullow and NAMCOR, and the piping of gas to shore for treatment and delivery to an 800MW power station to be developed and commercially operated by NamPower at Oranjemund. The produced electricity will be purchased by NamPower, for resale into the Namibian market, and by Eskom for the South African market. In April 2007, Tullow agreed to sell Itochu Corporation a 20% interest Production Licence 001. To earn the 20% interest, Itochu will pay 40% of the cost of two appraisal wells to investigate the significant upside potential of the Kudu field. In addition, under the terms of the transaction, Itochu will make further financial payments depending on the ultimate volume of reserves developed and will provide Tullow with beneficial development financing for the project.

• In March 2005, EnerGulf Resources Inc (Canada) signed an Memorandum of Understanding with the National Petroleum Corporation of Namibia (Namcor) to jointly explore and develop offshore Block 1171, which is located along the maritime border with Angola. EnerGulf announced on December 11, 2007, that the drilling of the Kunene #1 is expected to start between January 11, 2008 and February 15, 2008.
  

• In August 2005, BHP Billiton (Australian), Hunt Oil (U.S.), and Neptune Petroleum (U.K.) signed memoranda of understanding (MoUs) with Namibia’s Ministry for Mines and Energy. The MoUs allow the companies exploration rights for two years, with the option to renew the licenses at the end of that period.