Canadian junior ReconAfrica is about to drill its first seismically defined hydrocarbon well in the Permian aged Kavango Basin onshore Namibia.
The 8-2 well is the first of an initial four well drilling programme, which will test two of the Basin’s three play types; oil prone Karoo Rift Fill and Intra Rift Fault Block plays, determined by interpretation of parts of the 1,211 kilometres of two dimensional (2D) seismic data acquired within the company’s over 34,000 square kilometre licensed area.
Jarvie-1, the company owned 1000 HP drilling rig “is now on the first drilling location (8-2) rigging up and scheduled to spud on or before June 25, 2022”, ReconAfrica says in a release.
ReconAfrica has just completed the second phase of its 2D seismic acquisition (761 km) with plans for the next phase of 2D seismic acquisition, which is anticipated to comprise in excess of 1,000 kilometres of 2-D seismic, making 2,211 kilometres of 2D seismic altogether. This (second phase) will be an extensive programme and subject to permitting, the Company anticipates on the ground acquisition to begin the fall of 2022.
8-2 will be drilled to a planned depth of approximately 2,800 metres (9,184 feet) and is designed to test potential conventional oil and associated natural gas reservoirs in clastic rocks (sandstones) in the Karoo Rift Fill, the Company’s primary play. The well will also be drilled deeper into the Pre-Karoo Mulden and Otavi formations. These intervals correspond to zones in the Company’s first well, the 6-2, (a non-seismically defined stratigraphic test) which is approximately 6.5 kilometres to the East, that had good oil and gas shows. It is anticipated the well will reach total depth within 60 days from the initial spud. Netherland, Sewell & Associates, Inc. (“NSAI”), the Company’s independent qualified reserves evaluator, has estimated an unrisked gross 799Million barrels of original oil in place (OOIP) for the well 8-2. The estimated unrisked gross prospective resource, (P50 case) with a projected 17% primary recovery, is 138Million barrels of oil for this well. Prospective resources are the arithmetic sum of multiple probability distributions.
“These estimates are based on un-risked prospective resources that have not been risked for chance of discovery and chance of development. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development”, ReconAfrica cautions. “There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by applying future development projects”.
Patrick Pouyanne, TOTALEnergies’ CEO, says he is pleased that the company’s exploration team is successful with the wildcat well drilled in the Orange basin off Namibia. But, he stresses, it’s a promising discovery.
“I say promising because it’s only one well. I’ve seen incredible numbers of newspapers”, he told a group of investment analysts and bankers after the announcement of the company’s First Quarter 2022 results.
“We need to do the appraisal. We’ve decided to accelerate the appraisal well August, September and to test. And then we will be able to communicate larger”, Pouyanne said in English. “But if we are able to generate by ourselves all these oil discoveries, let’s be clear, it’s part of the strategy, and we will develop them and it’s in line with what we have announced”.
When Mr. Pouyanne was asked another question on the same topic several minutes after the first one he responded: “The first question I already answered. And do you believe in — stop reading newspapers. Just listen to me….In the long history in the oil and gas industry, a 10Billion barrel discovery, I don’t think it exists. But no, let’s be serious about all that. It’s — all that are fantasy. I say it’s a promising discovery. Let’s drill the appraisal well, let’s test the two wells and then we will come. And when will — if really, we had such levels, which I don’t think, we’ll be happy, and you will be happy shareholders”.
“So — but again, I think, by the way, this figure refers more to the Namibia province rather than just our license. But again, I don’t want —. Let’s wait. It’s a promising discovery. It’s enough”.
Sonadrill Holding Ltd), Seadrill’s 50:50 joint venture with Angola’s state oil firm Sonangol, has secured a ten-well contract with options for up to eight additional wells in Angola for the West Gemini drillship.
Total contract value for the firm portion of the contract is expected to be approximately $161Million (inclusive of mobilization revenue and additional services), with further meaningful revenue potential from a performance bonus.
Commencement is expected in Q4 2022 with a firm-term of approximately 18 months, in direct continuation of the West Gemini’s existing contract.
The West Gemini is the third drillship to be bareboat chartered into Sonadrill, along with two Sonangol-owned units, the Sonangol Quenguela and Sonangol Libongos.
Seadrill, the Norwegian drilling giant, will manage and operate the units on behalf of Sonadrill. The West Gemini is an ultra-deepwater drillship with an operational history offshore Africa.
“Together, the three units position the Seadrill joint venture as the premier rig operator in Angola, furthering the goal of building an ultra-deepwater franchise in the Golden Triangle and driving efficiencies from rig clustering in the region”, Seadrill says in a release.
The Litanzi infill drilling programme has led to increased output in the PNGF Sud acreage in Congo Brazzaville.
Two wells of the initial Litanzi infill wells have been put on production; well #1 (injector) is flowing for a cleanup period producing some oil and mostly water as expected, Well #2 (producer) was put on production on April 14th 2022 and has produced above expectation for the first eight (8) days with an average 3,368BOPD, raising the average gross PNGF production to approximately 25,000BOPD for the period.
The third well has been drilled to planned total depth (TD) and Perenco is preparing for running open hole logs.
The infill drilling programme on PNGF Sud commenced in November 2021 with the spud of the first of four wells on Litanzi as part of a total drilling programme of 17 infill and development wells across four fields in the licence area.
Sahara Energy Fields, the Nigerian indigenous independent, has commenced a three dimensional (3D) seismic survey in Oil Prospecting Lease OPL 228, in the Anambra Basin.
The company is acquiring 350 square kilometres of full fold seismic data.
The acquisition is part of Sahara’s obligatory work programme, to fulfill the terms of the licence award, but it’s not clear if the imminent data interpretation would lead to drilling.
Sahara operates OPL 228 with a 100% exploration interest. The company also has interests in OML 18 (16%) and OML 148 (100%), both of which are producing. Its other non-producing assets include OPLs 284 and 286 (90% each).
In 2019, Sahara executed a Finance and Technical Sales Agreement (FTSA) with the state firm NPDC for OML 11, through the West Africa Gas Limited, its subsidiary. But OML 11 is not listed in the company’s upstream asset portfolio.
Gwede Mantashe, South Africa’s mineral resources and energy minister, laments that his country has been chasing away exploration companies.
Oil explorers that recently made significant oil discoveries off the West African and South West African coasts have been “harassed” out of South Africa because it wants to be an “island of angels in a sea of poverty”, Mr. Mantashe declared at an energy conference recently.
“Shell, we chased out …of the Eastern Cape and it goes and makes a huge find next door in Namibia … ENI, we chased out in KwaZulu-Natal, they went to Côte d’Ivoire and made huge oil finds …”, Mantashe told the audience at the Africa Energy Indaba in Cape Town.
It’s an odd thing for a minister to say, but Mr. Mantashe, one of his country’s most experienced practicing politicians, was referring to the perennial victories of South Africa’s activists in the country’s courts of law and public opinion.
Since the 1960s Namibia was viewed as a graveyard for oil and gas explorers.
Chevron, Exxon, Texaco, Petrobras, Norsk Hydro, Equinor, Total, Tullow, HRT Oil & Gas and several others, tested the country’s coastline at various times.
Except for the modest-size Kudu gas field, discovered in 1974, there was nothing but dry holes.
In the last two years, however, approximately 5Billion barrels of oil and gas equivalent resources have been discovered. Sixty years after those early years of exploration, the sun is finally beginning to shine on Namibia.
Kavango Basin, Northern Namibia
Namibia’s oil renaissance began in 2021 when Canadian explorer ReconAfrica drilled two stratigraphic test wells onshore northern Namibia. These confirmed that a very large, previously unregarded sedimentary basin, called the Kavango Basin, exists beneath the sands of the Kalahari Desert. This basin is also called the Owambo (Etosha) Basin. The 6-1 well intersected over 300 metres of oil and gas shows and 200 metres of oil and gas shows was intersected by the 6-2 well. The two wells were drilled to provide stratigraphic, sedimentological, reservoir and geochemical information. Although the data in both wells was very positive, neither 6-1 nor 6-2 was tested since they were designed to be only stratigraphic wells. The license area is very large consisting of 25,500 square kilometers (8.5Million acres) and it covers most of the Kavango Basin. ReconAfrica has a 90% working interest in the license and 10% is held by NAMCOR, the national oil company of Namibia.
On April 4,2022, ReconAfrica announced that three exploration wells will be drilled in the second half of 2022. The primary zone to be explored is a Permian-age Karoo rift fill sequence of sediments. Based on the two stratigraphic wells and recently acquired high-resolution seismic, the basin is now viewed as highly prospective for conventional light oil and gas. The company believes that the drilling and seismic data interpretations have established a rift basin similar to other major oil and gas producing basins in the world including the North Sea. ReconAfrica has indicated that if the oil and gas production is achieved, it will be a conventional onshore producing operation and will not require hydraulic fracturing. The company and Namibia’s government are commited to minimize the environmental footprint in this environmentally and culturally sensitive area.
Figure 1. Namibia’s oil and gas concessions. From: NAMCOR, 2022
Graff Discovery, Orange Basin
In January of 2022, a swirl of rumours emerged to the effect that Shell had made a mega-oil discovery in the Graff-1 exploration well in the deepwater of Namibia’s segment of the Orange Basin. Graff-1 was drilled in 1,962 metres of water to a depth of 5,376 metres. Shell confirmed the news on February 7 and oil industry analytical companies such as Wood Mackenzie estimated that the Graff field has recoverable resources of 700Million barrels of light oil. The reservoirs are Early Cretaceous (Cenomanian) sandstones. Shell is now drilling the La Rona appraisal well which is aggressively positioned since it is a long-distance step-out well located eight kilometres (8 km) northeast of the discovery. Namibian government sources recently indicated that La Rona is “looking good”. According to the ongoing rumour mill, the results of La Rona are so positive it is raising expectations that Graff could contain 1Billion barrels of oil recoverable and up to 6Trillion cubic feet of gas. Accordingly, on a 6Mcf gas to 1barrel-oil-equivalency, Graaf may have recoverable resources of 2Billion barrels of oil equivalent (2BBOE).
Shell is operator with a 45% working interest and partners include Qatar Energy with 45% and NAMCOR with 10%. For oil industry observers and analysts, the magnitude of the play-opening Graff discovery is truly amazing. There are now speculations that Shell is already giving thought to utilizing at least one floating LNG (liquified natural gas) vessel to produce the gas and an FPSO (floating production, storage and offloading vessel) to produce the oil.
Figure 2. Locations of Graff and Venus oil discoveries, La Rona step-out well and Kudu. Yellow outline is Cretaceous Aptian-Albian play extent. From: OilNOW, Westwood, April 9, 2022
Venus Discovery, Orange Basin
Two weeks after Shell’s announcement about Graff-1, TOTALEnergies announced on February 24 that the Venus-1X deepwater exploration well, drilled in Block 2913B, had intersected 84 metres of net pay in a high-quality Lower Cretaceous sandstone reservoir containing light oil and associated gas. The well was drilled in 2,900 metres of water to a total depth of 6,296 metres. Wood Mackenzie is reported in various oil industry publications as saying that Venus may hold recoverable oil resources of about 3Billion barrels of oil, which positions it as Sub-Sahara Africa’s largest ever oil discovery. If these estimates are confirmed by drilling, then Venus is larger than any of Nigeria’s giants: Agbami, Akpo and Egina fields, as well as Angola’s Girassol and Dalia oil fields. TOTALEnergies is operator of Venus-1X with a 40% working interest and the partners include Qatar Energy 30%, Impact Oil & Gas 20% and NAMCOR with 10%.
In view of the possible large extent of the Venus discovery, the field may eventually be produced through several FPSOs.To the great surprise of long-term observers of Namibian oil and gas, in the next decade Namibia could become Sub-Sahara’s third largest oil producer after Nigeria and Angola. The combination of the Graff and Venus discoveries amounts to an almost unimaginable 5Billion barrels of recoverable oil and gas equivalent resources. The Graff and Venus discoveries, together with the speculated encouraging La Rona step-out well, confirm the enormous potential of the Orange Basin, in both Namibia and South Africa, as an emerging hydrocarbon province.
Where Does This Leave Kudu?
For years oil companies along with Namibia’s energy officials wrestled with trying to construct a commercially-viable operation out of the Kudu gas field. A key problem is that the field’s contingent resources of 1.4Trillion cubic feet of gas are relatively modest. Eight wells have delineated the Kudu gas reservoir. However, it is neither a simple continuous marine sheet sand nor does it consist of attractive turbidity basin floor fan sands. Rather the reservoir consists of Triassic-age aeolian (desert) sands interbedded with volcanics, mainly basalts. Kudu is 130 kilometres from the shore and the water depth is 170 metres which is operationally manageable. Operational challenges are that the reservoir is deep at 4,500 metres and the seas in the Kudu area can be very rough.
Namibia’s government has always viewed Kudu as a nationally important project for the country. The plan was to have Kudu’s gas pipelined to a proposed 800-megawatt gas-to-power electricity plant to be built near Oranjemund. Namibia suffers from an electricity deficit, with diesel generators currently providing 30% of the country’s grid-connected supply. Gas from Kudu would have replaced the high-cost diesel-burning generators. A dilemma was that there would have been too much electricity generated from Kudu to be consumed by Namibia’s small population of only 2.5 million people. Much of the population consists of subsistence farmers whose energy consumption is minimal. Excess electricity would need to have been exported to electricity-deficient neighbouring countries like Zambia and South Africa which are faced with looming electricity shortages. Indeed, the overall region suffers from energy poverty.
Since its discovery by Chevron in 1974, development of Kudu has been bogged down by issues related to reserves, commerciality, and ongoing negotiations with neighbouring countries.
However, the Kudu project may be finally moving. Oslo, Norway-based BW Energy is operator of the project with a 95% interest and NAMCOR has 5%. BW Energy is also involved in oil production offshore Gabon and Brazil. The company has negotiated the purchase of a semi-submersible drilling rig that is set to be the hub of the gas-to-power project. The acquisition is part of a revamped development which could have BW Energy also involved in the power generation aspects of the project. Recent indications from the Namibian government are that Kudu will likely receive government approval in 2023.
Nevertheless, the totally unexpected mega-oil and gas discoveries by Shell and TOTALEnergies have completely up-ended the government’s views on Kudu. In a recent industry seminar, Namibian government officials explained that Kudu must now be viewed in context of the huge oil and gas discoveries made in Graff and Venus. A wholistic Orange Basin gas development “road map” must be developed. Indeed, gas from the Graff field could be pipelined to Kudu and contribute as feedstock for the powerplant at Oranjemund. With the gas suddenly found in Graff and Venus, Kudu could now be much more commercially viable. Basin-wide scenarios must be considered including exporting gas from the Orange Basin as LNG to gas-hungry markets in Europe and Asia.
Oil discoveries like Graff and Venus, if proven to development threshold, can be the catalyst to unlock the gas potential of projects like Kudu. This has been the model in West Africa for decades where oil discoveries were developed first and then gas discoveries were developed thereafter. Fast tracking of oil developments led the commercialisation of the gas. Nigeria’s Bonny LNG project would not have happened without the initial oil developments. The same model applies to Angola’s Soyo LNG project and also to the smaller LNG projects in Equatorial Guinea and Cameroon. In every case oil is first and then followed by gas. A well worn and proven path that works.
The Namibian government wants Shell and TOTALEnergies to fast-track the Graff and Venus oil discoveries. IHS Markit hosted CERAWeek in Houston, Texas on March 7 – 11, 2022. Namibia’s Minister of Mines and Energy, Tom Alweendo in a keynote speech said that the Namibian government wants the oil discoveries to benefit the Namibian people. He wants all Namibians to have access to affordable and reliable electricity. Due to Namibia’s abundant wind and solar, he believes the country will also become a regional hub for green energy. Consideration will also need to be given for Namibia to eventually export green and gray hydrogen to markets worldwide.
Despite Namibia’s mineral resources and tourist industry, Namibia is not a rich country. It has a per capita income in 2020 of only $4,200 per person compared to the USA’s $63,500. Life expectancy in Namibia is 63 years compared to 83 years for Canadians. The revenue and employment opportunities created by oil and gas production, if properly managed, will be hugely beneficial for Namibia.
On February 24, 2022 Russia invaded Ukraine. This has much accelerated the world’s need for stable and secure supplies of oil and gas. The discoveries in Namibia could help alleviate global shortages.
All indications are that the oil and gas discoveries of the past two years will be transformational for Namibia’s economy and people.
Tako Koning is a Calgary, Canada based energy consultant who lived and worked in Angola for twenty years from 1995 to 2015. He also lived and worked in Nigeria from 1992 to 1995 as assistant managing director for Texaco. He is a graduate from the University of Alberta in 1971 with a B.Sc. in geology and also graduated from the University of Calgary with a B.A. in Economics. He is a registered professional geologist with the Association of Professional Engineers and Geoscientists of Alberta (APEGA). In Angola, Koning was employed by Texaco, Tullow Oil and the British/American consulting firm of Gaffney Cline & Associates. He has been on the International Advisory Board of Africa Oil + Gas Report since its inception in 2001. In 1994, Koning was awarded Honorary Life Membership by the Nigerian Association of Petroleum Explorationists (NAPE) for his work with Nigerian university students including visiting universities and giving lectures on petroleum geology, resource economics and geopolitics.
Canadian minnow, ReconAfrica, has initially identified five drillable prospects (including sidetracking of the 6-2 well) and eighteen leads in the first of five sub-basins, in the 8.5Million acre-sized Kavango basin.
The company integrated the two dimensional (2D) seismic data it acquired, with the results of the first two stratigraphic test wells it drilled in the basin, “and established a significant rift basin similar to the other major petroleum provinces/rift basins including onshore Africa, and areas of the North Sea”.
The initial exploration and development is being conducted in the first of five sub-basins, it says.
“Thus far, the integrated interpretation has established three groups of hydrocarbon opportunities (“Plays”), including:
Primary: Karoo Rift Fill (Light Oil)
Secondary: Intra-Rift Fault Blocks (Light Oil)
Secondary: Damara Fold Belt (NEW PLAY, Gas/Gas Condensate)
The work has initially identified five drillable prospects (including sidetracking of the 6-2 well) and eighteen leads in the first of five sub-basins. These leads will potentially be matured to drillable prospects driven by the second phase of 2D seismic acquisition currently underway.
Six potential reservoir and four potential source rock intervals have been established in the basin so far. Initial thermal analysis indicates the lower Karoo Rift Fill source rocks should be in the light oil maturation interval.
New Play established: Interpretation of the first phase of seismic data also identified a new play, the Damara Fold Belt, that was not anticipated in the original studies of the Kavango Basin. These structures as illustrated by the seismic example, delineated in purple, in the Play Map appear coherent, mappable and potentially large.
Termed ASF-1 on the Play Map, an active combustible gas seep was found that is clearly thermogenic hydrocarbons and part of an active petroleum system, as confirmed by third party analysis. It also supports the concept of potentially more than one source rock system, including both light oil and gas/gas condensate.
For 2022 ReconAfrica plans to initiate a multi-well drilling programme, beginning with three test wells and a sidetrack of the 6-2 well. These will be the first wells drilled into seismically defined traps with the objective to prove commerciality of this petroleum system. The Company and relevant governmental authorities are advancing drilling permits with a target to spud the first of the three wells in Q2 2022.
The Phase 2 seismic acquisition (approximately 600 kms) is ongoing with good progress to date, emphasizing prospect definition and extension into new areas to the east and south.