As the scramble for Namibian oil heats up, four of world’s five largest listed oil companies -known as the super-majors- have now entered Namibia’s red hot orange basin with only ExxonMobil yet to register its interest.

These super-majors – BP, Shell, Chevron, ExxonMobil and TotalEnergies – have made profits of more than a quarter of a trillion dollars since Russia’s invasion of Ukraine led to dramatic increases in energy prices and household bills.

This translates to US$281 billion since the war began in February 2022, according to Global Witness.

The Orange Basin continues to reveal substantial deposits of untapped oil and gas. The discovery of light oil in the Enigma-1X well – located in PEL 39 – by energy major Shell marked the latest addition to Namibia’s string of sizeable oil discoveries by TotalEnergies, Galp and others. The discovery followed the Venus-1X, Graff 1-X, Jonker-1X, La Rona-1X, Lesedi-1X, Mopane-1X, and Mopane-2X finds, showcasing the immense potential lying within the basin.

BP JOINS SCRAMBLE FOR OIL

With Chevron having made its plans to explore the orange basin clear in recent weeks, late last week, Business Express reported that the latest to enter the basin is BP.

Through its 50:50 joint venture with Eni which is channelled via Azule Energy, BP struck an agreement with privately owned Rhino Resources to enter Petroleum Exploration Licence 85 which covers Block 2914A.

This block is close to Galp Energia’s huge Mopane discovery and next door to acreage where Shell has made five discoveries.

Under the terms of the agreement, Azule Energy has secured a 42.5% interest. Following the completion of the acquisition, Azule Energy plans to drill two high-impact exploration wells as part of a work program in the area, with the initiation of the first well anticipated as early as Q4, 2024. These wells are anticipated to play a crucial role in unlocking the hydrocarbon potential of the Orange Basin, thereby supporting Namibia’s energy security and economic growth.

Additionally, the agreement provides Azule Energy with an option to become the operator of PEL 85, showcasing the company’s commitment to responsible resource management and operational excellence. The current contractor group consists of Rhino Resources Namibia as the operator with an 85% interest, Namibia’s national oil company NAMCOR with a 10% interest and indigenous company Korres Investments with a 5% interest. This consortium represents a diverse range of expertise and resources, ensuring a well-rounded approach to exploration and development activities in the Orange Basin.

UNLOCKING NAMIBIA’S POTENTIAL

Representing the voice of the African energy sector, the African Energy Chamber (AEC) said it stands in support of Azule Energy’s venture into the Orange Basin, recognizing the value of the transaction in unlocking the full potential of the country’s oil and gas resources. The deal is a testament to the prospectivity of the basin as well as the high level of international interest in Namibia’s offshore oil and gas opportunities.

In this context, Azule Energy’s Farm-In Agreement assumes greater significance, as it underscores the company’s commitment to exploring and developing the region’s hydrocarbon resources. By participating in the exploration activities in Namibia’s Orange Basin, Azule Energy not only demonstrates its confidence in the prospectivity of the area but also contributes to the broader goal of enhancing Namibia’s energy landscape.

“It is an exciting moment for exploration in Namibia. This farm in further confirms Namibia as one of the world’s most prospective, underexplored hotspots, with billions of barrels of oil yet to be found. We still believe that there will be many more similar farm-in deals by companies holding exploration assets in this emerging country,” stated NJ Ayuk, the Executive Chairman of AEC. “The Chamber commends Azule Energy and Rhino Resources Namibia for their vision and commitment and look forward to supporting their efforts as they work to unlock the full potential of Namibia’s offshore resources”

With each find, Namibia inches closer to harnessing these opportunities for commercialization. As the government progresses towards a strategic plan to capitalize on these prospects, it aims to streamline regulatory frameworks, attract further investment and foster sustainable development in the energy sector.

The five super-majors are forecast to reward investors with record payouts of more than US$100 billion in 2023 when figures for the full financial year are published in the coming weeks, despite growing public outrage and criticism of the fossil fuel profit machine.

The Institute for Energy Economics and Financial Analysis (IEEFA) said companies were likely to pay shareholders even more this year despite weaker commodity market prices leading to lower profits.