Namibia: Independents to Drive Next Phase of Exploration

Leading independent explorers discussed the next phase of oil and gas discoveries in Namibia at the Namibian International Energy Conference (NIEC) in Windhoek, Namibia, on Thursday.

Expanding its scope in the Orange Basin, Sintana Energy recently announced its acquisition of an interest in Giraffe Energy, which holds interests in PEL 79 alongside operator NAMCOR. Sintana expects further appraisal and exploration expenditures in Namibia and holds existing interests in PELs 83, 90 and 87.

“In addition to the expansion of our Orange Basin platform, the most important part of the acquisition is to ensure that our business is for the benefit of Namibians. The acquisition included the opportunity to make a contribution to a community trust, together with The Knowledge Foundation, which is a first-of-its-kind direct mechanism for local Namibians to benefit from this industry,” said Robert Bose, CEO of Sintana Energy.

In addition to the Orange Basin, Namibia’s exploration blitz is opening up opportunities in its frontier and onshore acreage – including the Walvis, Kunene, Lüderitz, Kavango and Namibe Basins – which are being led by juniors and independents who are seeking exploration partners.

“I have no doubt that the Walvis and Lüderitz basins will be subject to additional huge oil discoveries in the next few years – for this we need to partner with the big and the best,” said Gil Holman, CEO of Eco Atlantic Oil & Gas Ltd.

“We have proven oil and gas onshore and are starting the drilling program in June 2024. Our strategy is based on early entrance in the Kavango Basin, and to prove a petroleum system in the area,” said Robert Mwanachilenga, VP & Country General Manager of ReconNamibia, adding, “We are looking for a joint venture partner – we know we’ve got good rocks there.”

As Namibia continues to yield high-impact discoveries, the panel addressed anticipated mergers, acquisitions and farm-in/farm-out activity, along with the importance of securing the right terms to cover development, appraisal and exploration costs.

“As this second wave [of exploration] happens in Namibia, we are going to see corporate sales and farmouts. At RMB, we look at the landscape and level of interest… A key focus for us is the structure – how much interest will you be left with and what type of carry it is? One of the key pitfalls is the caps on carries that don’t have any room for fluctuation if costs go up,” said Liz Williamson, Head of Energy Corporate Finance for Rand Merchant Bank.

Efforts to localize service delivery and execution will also play a key role in ensuring the long-term and sustainable development of Namibia’s hydrocarbon discoveries, with IOCs investing in local and regional capabilities.

“Namibia is still new in this space – there is not a lot of infrastructure or expertise to support what is coming. As a result, Baker Hughes has taken a strategic approach to enable this industry for years to come, investing in human capital through education centers and on-the-job training. Mid- to long-term, it’s about knowledge transfer to local companies and building capabilities for sustainability,” said Ahmed Elbehery, OFSE Vice President for Sub-Saharan Africa, Baker Hughes.

Energy Capital & Power is a media partner of the Namibia International Energy Conference (NIEC) – taking place in Windhoek on April 23-25, 2024. The 6th annual conference unites industry leaders, business executives and policymakers to engage in dialogue, exchange ideas, create new partnerships and identify strategies to foster a prosperous energy industry in Namibia and beyond. For more information, please visit https://www.nieconference.com/