26 July 2018

Namibia: Rush to Strike Oil Begins, Again

Windhoek — The Namibian coastline is set to be a hive of activity from September onwards with a behemoth of a drilling ship poking deep underwater to see if the ocean bottom renders true the much vaunted expectations of an economically viable oil discovery for Namibia. British Tullow Oil and London-listed Chariot Oil & Gas have contracted the services of offshore drilling contractor Ocean Rig, whose drilling ships, especially the Poseidon, have searched for oil in Angolan and Tanzanian waters. A recent announcement by Shell Namibia that it plans to drill two exploration wells in 2019 has fuelled expectations that the drilling activities of Ocean Rig might continue throughout next year.

This week Chariot Oil & Gas Limited told investors that it would be taking another bite at exploration drilling to see if it can strike black gold off the Namibian coast, in what is called the Walvis basin. Chariot, in which local entrepreneur Heinrich Swapo Ndume owns about 5 percent through Protech Namibia, is conducting the exploration in partnership with AziNam, and local partner Ignitus Oil & Gas which is led by Namibian entrepreneur Leefa Ndilula. New drilling is now scheduled for the fourth quarter of this year, offshore Namibia, Chariot Oil & Gas said.

"Ocean Rig Poseidon is to drill Prospect S, a possible high impact well targeting an estimated 459 million barrel prospective resource, with an estimated probability of geologic success of 29," said Larry Bottomley the chief executive of Chariot Oil & Gas.

The company says the area dubbed as Prospect S is one of five new prospects, all of which are estimated between 283 million to 459 million barrels each, and the explorer said that success could de-risk more than two billion barrels of further prospective resources.

Chariot holds a 65 percent interest in the exploration blocks while AziNam holds 20 percent. The state-owned petroleum company, Namcor, holds 10 percent carried interests while Ndilula's Ignitus Oil & Gas holds 5 percent in carried interest.

Last month the Azinam managing director, David Sturt, commented that they "are very excited by this well, the first in our drilling program".

"Prospect S is located in PEL 71 which extends over 16,000km² and if successful it will unlock significant value as we have a considerable stable of analogous drill-ready prospects within this licence and across our licence portfolio," Sturt said then.

Ocean Rig said in a statement that it has entered into a new drilling contract with Chariot Oil & Gas Limited for a one-well drilling program, for drilling offshore Namibia. "The contract is expected to commence in direct continuation of the previously announced program with Tullow Namibia Limited in the third quarter of 2018 and will be performed by the Ocean Rig Poseidon," the statement said.

It has previously stated that its contract with Tullow Oil is expected to start in the third quarter of 2018 and to be performed by the Ocean Rig Poseidon drillship.

"We are pleased to announce additional work for the Ocean Rig Poseidon. The rig is currently transiting to Walvis Bay, where it will remain in 'ready-to-drill' state and continue to be actively marketed for employment," said Pankaj Khanna, president and chief executive officer of the company.

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