Namibian offshore project may entice other investors to the country

Namibia homelands 78A map of Namibia and its offshore and homeland territories. (Image source: U.S. Central Intelligence Agency/Commons)Namibia is looking to make progress on its flagship Kudu gas project this year, encouraging the many smaller upstream investors who continue to believe in the southwest African country’s offshore potential

Though not known as one of Africa’s great oil and gas producers, Namibia has long enticed international investors, and for good reason.

In terms of location, the country sits just beneath Angola, one of Africa’s top two oil exporters, alongside Nigeria, which continues to yield immense offshore riches, pulling in billions of dollars in foreign investment. This offshore search has spread into Namibian waters, where most of the country’s potential is believed to be located.

It is not just potential either, with oil and gas already identified, including the giant Kudu gas field, discovered way back in 1974. The offshore field sits approximately 170 km north-west of the city of Oranjemund, on the border with South Africa, and in around 170 metres of water. Reserve estimates vary hugely, with at least 1.3 trillion cubic feet of confirmed natural gas, potentially running up to 9 trillion cubic feet, subject to further exploratory work.

Although commercialisation of this field has thus far eluded the industry, various development options through the years have included piping the gas to the shore to feed a large power plant - the current preferred option - a floating liquefied natural gas (FLNG) facility, and even running gas across the border by pipeline to South Africa. 

Earlier this year, BW Kudu Limited, a wholly owned subsidiary of BW Offshore, took a 56 per cent stake in the Kudu block, joining state oil firm, National Petroleum Corporation of Namibia (Namcor). It is the latest in a long line of investors and owners linked to Kudu, that include the likes of Shell, Chevron, and, more recently, Tullow Oil and Gazprom. This time, there is a belief that Kudu’s potential can be unleashed, with the development of a gas-fired power plant onshore central to the development.

BW Offshore’s chief executive, Carl K. Arnet, announcing the deal in February, said the new-look consortium aims to secure a final investment decision (FID) by the final quarter of 2017: "BW Offshore will now start the work with the Namibian government, Namcor, NamPower (the Namibian power utility), large infrastructure investors and other stakeholders to get this very exciting project to FID,” he said.

Read the full report in the latest issue of Oil Review Africa below. 

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