BW Energy Raises Stake in Kudu Gas Field to 95%
OSE-listed BW Energy Ltd. has entered into a farm-in and carry agreement with state-owned National Petroleum Corporation of Namibia (NAMCOR) to increase its interest in the offshore Kudu gas field from 56% to 95%.
Under the terms of the agreement, BW Energy’s wholly-owned subsidiary BW Kudu Ltd. will acquire an additional 39% interest in petroleum license PL 003 that contains the Kudu gas field, in exchange for a cash consideration of US$4 million. In addition, the company will also fully carry NAMCOR share of development costs until first gas. Upon completion, NAMCOR will hold a reduced 5% interest in the field, with an option to acquire an additional 5% working interest after first gas.
The Kudu gas field covers an area of 4,567 sq. km in the Orange basin, situated about 130 km off the coast of southern Namibia, in water depths of approximately 170 m. The field was discovered by Chevron Corp. in 1974 with the drilling of the Kudu-1 well. An additional 8 wells have been drilled since by various oil companies including Royal Dutch Shell Plc and Tullow Oil Plc, all of whom subsequently withdrew from the project.
The Kudu field contains an estimated 1.3 trillion cubic feet (Tcf) of best estimate (P50) prospective resources (as of December 31st, 2020). The planned Kudu Gas to Power project calls for gas from the field to be produced by a floating production unit before being exported by a 170 km pipeline to a new 885 MW power station that will be built and situated at Uubvlei, located around 25 km north of Oranjemund.
“Kudu Gas is an important project for the energy sector and for Namibia. It has the potential to provide a valuable contribution to Namibia’s energy mix and local value creation by monetizing stranded gas which is an untapped natural resource in Namibia,” said Carl K. Arnet, the CEO of BW Energy.
“It represents an opportunity to reduce carbon emissions and strengthen energy independence for Namibia, which currently imports a major part of its electricity from coal fired power plants outside of the country. I am confident this development will inspire increased exploration initiatives in other licence areas in the country,” said Immanuel Mulunga, NAMCOR’s Managing Director.
Oslo-based BW Energy is focused on upstream operations in Gabon and Brazil, and currently holds a 73.5% operated interest in the producing Dussafu Marine permit offshore Gabon and a 95% operated interest in the Maromba field currently under development in the Campos basin, offshore Brazil. The company is 68.6% owned by BW Offshore Ltd., with the remaining stake being held by the BW Group (which holds a 49.9% shareholding in BW Offshore).
The agreement is subject to the receipt of approval from the companies’ boards and Namibian regulatory authorities.