FPSO specialist BW Offshore has entered into a farm-out agreement with the National Petroleum Corporation of Namibia (NAMCOR) for a 56 percent stake in the Kudu license, offshore Namibia.
BW said on Tuesday that the state-owned NAMCOR would hold the remaining 44 percent of the license. As a result of the transaction, BW Kudu, a wholly owned subsidiary of BW Offshore, will become operator of the license.
BW Kudu will pay for past costs upon transfer of the field interest to the company. The final investment decision for the field is planned for the fourth quarter of 2017.
Carl K. Arnet, CEO of BW Offshore, said: “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.
“Kudu represents another opportunity for BW Offshore to take a proactive development role in a project that will produce for 15-25 years. Falling development costs after the 2014 drop in oil prices has helped in making the project economically feasible.”
The Kudu field was discovered by Chevron in 1974 approximately 170 kilometers off the coast of Namibia. A further seven appraisal wells have been drilled since then by various oil companies including Shell and Tullow who subsequently withdrew from the project.
The field is estimated to contain 1C-2C-3C contingent resource range of 755-1,330-2,308 billion standard cubic feet of gas respectively within the main reservoir. The gas from the Kudu Gas-to-Power project would be produced by a floating production unit before being exported by pipeline to a new 885 MW gas to power plant onshore Namibia.
NAMCOR’s Managing Director Immanuel Mulunga said the project would play a fundamental role in shaping the energy dynamics of Namibia.
“The Kudu Gas-to-Power Project is a key strategic power generation project for Namibia, which will significantly reduce reliance on imported power while at the same time accelerating economic development. It will not only enable Namibia to entirely cater for its power needs but become a net exporter of power to regional markets,” said Mulunga.
Last December BW formed an oil and gas company to buy a stake in an offshore block in Gabon. Namely, BW through a joint venture agreed to buy 66.67% of the Dussafu production sharing contract offshore Gabon, owned by Harvest Energia, for $32 million in cash.