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Namibia considers oil block auctions

Thu, 17 April 2014 17:26
by
News Flash




Namibia may revert to auctioning oil and gas exploration blocks
because it will give the Government better terms than the existing
open licensing system, said Petroleum Commissioner Immanuel Mulunga.

"We can get better terms because it will be an auction," Mulunga said
in an interview in the capital, Windhoek yesterday. "We should do it.
We have enough licenses and we need to focus on those ones to carry
out the work."

Namibia, which has issued 46 exploration licenses, adopted an open
licensing system after an auction in 1998 failed to attract investors.
A decision on whether to adopt a new system has yet to be made,
Mulunga said.

Namibia has attracted attention from the world's biggest oil companies
even after at least 18 wells failed to find commercial deposits of
crude. Explorers such as BP Plc (BP/) and Chariot Oil & Gas (CHAR)
Ltd. have snapped up assets on a bet that the nation's coastal shelf
may mirror that of Brazil across the Atlantic, while Royal Dutch Shell
Plc (RDSA) announced in February it was taking over two exploration
blocks in the Orange Basin.

"That's barely scratching the surface considering the size of the
area," said Mulunga, commenting on the exploration wells. "We expect
the smaller companies we have licensed to bring in the bigger
players."

A spate of 3D seismic surveys suggests the next two years will be
"critical" for the exploration industry, he said.

"There is going to be another bigger player coming into Namibia before
year end, but we want companies shooting 3D seismic to work toward
drilling," said Mulunga. "The more exploration wells are drilled, the
better the chances for a discovery."

Namibia's neighbour Angola is Africa's biggest oil producer after
Nigeria.-Bloomberg